SK Bioscience buys 6.5 million Novavax shares for $83.4 million

SK Bioscience Co., the drug-making unit of South Korea’s SK Group, said on Wednesday it has signed a deal to buy 6.5 million shares in US vaccine maker Novavax Inc. for 110 billion won ($83.4 billion).

The strategic investment follows the recent termination of SK Bioscience’s deal to produce medicines for Novavax under contract manufacturing organization (CMO) and contract development and manufacturing organization (CDMO) schemes signed during the COVID-19 pandemic.

Separately, Novavax extended its technology licensing deal with SK Bioscience for a COVID-19 variant vaccine under development given the changed conditions of the coronavirus becoming endemic.

Under the deal, SK will produce and supply the drug substance and immunity-raising adjuvant Matrix-M of Novavax's COVID-19 variant vaccine in the form of pre-filled syringes at SK’s vaccine plant L House in Andong, North Gyeongsang Province.

SK will have exclusive supply and production rights for the product in Korea and non-exclusive rights in Thailand and Vietnam.

Through this contract, SK plans to play a preemptive role in preventing virus infections in the post-COVID-19 era. Specifically, it will systematically respond to rapidly changing quarantine situations and achieve sustainable growth with a two-track strategy of developing its own vaccines and quickly supplying those developed abroad.

SK Bioscience said it will maintain a strategic relationship with Novavax to enhance its presence in overseas markets.

"SK Bioscience's significant decision to invest in Novavax reflects their confidence in our scientific and commercial expertise, and the potential to increase value for both companies and their stakeholders," Novavax Chief Executive John Jacobs said. "We look forward to evolving our relationship to focus on commercialization and identifying strategic future opportunities while we continue to pursue our shared goal of delivering life-saving vaccines in the region."

SK Bioscience CEO Ahn Jae-yong said: "SK Bioscience is focused on developing a successful global cooperative model in terms of company growth, health promotion, and ability to respond to the next pandemic."

Through the equity investment, SK Bioscience plans to expand strategic cooperation with Novavax and seek new forms of collaboration in the use of Matrix-M. The goal is to accelerate the development of SK Bioscience's self-developed vaccines.

The company will also promote its "glocalization" project of transplanting R&D and production bases into countries with an insufficient vaccine infrastructure, SK said.

Write to In-Hyuk Park at hyuk@hankyung.com

In-Soo Nam edited this article.