SK in talks to buy French biologics contract manufacturer

SK Holdings is in the early stages of negotiations to acquire France’s biologic contract manufacturing organization (CMO) Yposkesi, in a move to expand its CMO business into gene therapy, according to investment banking sources on Dec. 16.

The possible acquisition, estimated in the multimillions of dollars, will likely become the South Korean company’s third cross-border buyout and complement its synthetic drug-focused CMO portfolio.  

SK Group has become the world’s fifth-largest CMO through acquisitions of two global startups. It acquired Bristol-Myers Squibb's manufacturing facility in Ireland and California-based AMPAC Fine Chemicals, a contract development manufacturing organization, between 2017 and 2018.

SK Pharmteco will take the lead in the acquisition talks. It is a synthetic drug CMO, wholly owned by SK Holdings. Details of the talks will likely be made available to the public around the first half of next year, said the sources.

Yposkesi specializes in gene and cell therapies. Founded in 2016, the French bio CMO produces viral vectors, a key challenge in gene therapy development. The startup is located in the Genopole biotech hub in Paris, France, with a production capacity of 1,400 pyong. One pyong is equal to 3.3 square meters.

Gene therapy is an experimental technique of inserting a gene transfer into a patient’s cells to treat a disease, or a process of replacing defective genes with healthy ones. It is regarded as a revolutionary approach because it aims to treat complex diseases by regulating gene expression.

Along with the pharmaceutical arms of drug developer SK Biopharmaceutical, SK Pharmteco and SK Bioscience, SK Holdings hopes to build CMO supply chains of both synthetic and biological drugs in key centers across the US, Europe and Asia.

Earlier this month, the holding company of SK Group invested $200 million in Roivant Sciences, a Switzerland-based biopharm startup, to jointly push into the protein degradation field.

SK Pharmteco is expected to post around 700 billion won ($642 million) in sales this year, about seven times more than its annual sales in 2016, prior to the two cross-border acquisitions. Market speculation is that it might seek an initial public offering around 2022.

Separately, SK Bioscience entered into clinical trials for its COVID-19 vaccine candidates last month. It is expected to list on the Seoul main bourse as early as the first half of next year, following affiliate SK Biopharmaceuticals Co.'s successful trading debut in July.

Earlier in August, SK Bioscience secured a CMO order for a new coronavirus vaccine candidate under development by the US-based Novavax Inc.

Write to Jun-ho Cha at chacha@hankyung.com
Yeonhee Kim edited this article.