Lotte’s drugmaking ambitions will take root in the U.S. at a Bristol Myers Squibb plant in East Syracuse, New York.
The South Korean conglomerate—making a foray into the biologics contract manufacturing business—is throwing down $160 million for the BMS production facility, which is slated to become the center for North America operations for Lotte’s CDMO efforts in the U.S., multiple outlets have reported.
Founded in 1967, Lotte Group is Korea’s fifth-largest conglomerate, with hands in the food and beverage, retail, chemical and hotel and service sectors, the company noted Friday.
Under the deal, which is expected to close in the second half of the year, Lotte will continue to manufacture biologics for BMS from the plant as part of a “newly-established CDMO relationship” with the Big Pharma. Lotte is due to inherit the East Syracuse site’s operations and assets, including property, equipment and the plant’s workforce.
"Approximately 420 BMS employees work at the facility with the direct support of over 100 on-site contractors," a BMS spokesperson said over email.
Over time, Lotte plans to use the facility as a base from which to grow its CDMO offerings, the company added. Until the deal closes, the plant will continue to operate as part of BMS’ manufacturing network, the companies said.
On its website, BMS says its Syracuse facility cranks out four commercial biologics: Opdivo, Yervoy, Nulojix and Empliciti. The site was set up way back in 1943 to answer the U.S. government’s call for large-scale penicillin production.
“The East Syracuse site has been an important part of our company’s history and our manufacturing network for many decades, and we are confident that LOTTE will fully leverage the facility, its capabilities and its experienced workforce as it continues to play a vital role for patients around the world,” Karin Shanahan, executive vice president of global product development and supply at BMS, said in a statement.
Lotte, for its part, aims to leverage the facility to “rapidly scale and expand” its biologics CDMO in North America, Hunki Lee, EVP of Lotte Corporation, said in a statement. The South Korean company is plotting “significant investments” in the facility down the line, the executive added.
The company’s pivot into healthcare is relatively fresh, Bloomberg pointed out, with Lotte recently laying plans to invest 2.5 trillion won (about $2 billion) to carve out a presence over the next 10 years. The company plans to set up its new drugmaking unit, Lotte Biologics, by the end of the month, Bloomberg added.