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SK Bioscience aims for March listing; enterprise value may reach $4.5 bn

By Feb 08, 2021 (Gmt+09:00)

SK Bioscience aims for March listing; enterprise value may reach .5 bn

South Korea-based SK Bioscience Co. is planning its trading debut next month on the country's main bourse, Kospi. The company's enterprise value is expected to reach 5 trillion won ($4.5 billion), making it one of the most anticipated listings of the year.

SK Bioscience recently submitted its securities report to the Financial Services Commission (FSC). The company plans to issue around 30 million shares with the offering price estimated between 49,000 won and 65,000 won, according to the company's regulatory filing on Feb. 5.

The company will hold the bookbuilding for institutional investors on Mar. 4 and 5, followed by the subscription slated for Mar. 9 and 10. The company is aiming to raise up to 1.5 trillion won. NH Investment & Securities is the IPO lead manager.

The Korean vaccine maker plans to use the proceeds to expand its research and production facilities; develop new pipelines; foster partnerships; and enhance its vaccine portfolio. The company is also keen on improving shareholder value while securing resources to aid its growth as an innovative vaccine maker.

SK BIOSCIENCE BECOMES BASE FOR COVID-19 VACCINES

SK Bioscience was founded in 2018 as a spin-off of SK Chemicals Co.'s vaccine division. The company is well known for its cell culture-derived influenza vaccine, shingles vaccine, chickenpox vaccine and hemophilia treatment medicine. Recently the company has come into the limelight for its COVID-19 vaccine development and manufacturing orders.

Last year, the company signed a contract manufacturing order (CMO) to produce the pandemic vaccine candidate for the UK-based AstraZeneca Plc. SK Bioscience also inked a contract development and manufacturing (CDMO) order for a COVID-19 vaccine candidate developed by US-based Novavax Inc.

Separately, SK Bioscience is developing two types of coronavirus vaccines that have recently begun clinical trials. Last November, the company received approval from the Ministry of Food and Drug Safety to start Phase 1 clinical trials for its COVID-19 vaccine candidate NBP2001. The company's second vaccine candidate, GBP510, has received $3.6 million in funding from the Bill & Melinda Gates Foundation.

Last month, Korea Disease Control and Prevention Agency selected SK Bioscience to establish and manage the COVID-19 vaccine distribution system. The Korean vaccine maker will oversee the distribution and storage of vaccines made by AstraZeneca, Janssen, Pfizer and the COVID-19 Vaccines Global Access (COVAX) facility.

The Korean government has also decided to pre-purchase 20 million doses of the COVID-19 vaccine from Novavax this month, guaranteeing another stable revenue channel for SK Bioscience.

“If the pre-purchased vaccines are priced at $20 per dose, then the contract could be valued at around $800 million with an operating profit of near $200 million,” said Seo Keun-hee, an analyst at Samsung Securities.

SK Bioscience researcher in vaccine development
SK Bioscience researcher in vaccine development


SK BIOSCIENCE, ANOTHER IPO BLOCKBUSTER FOR SK GROUP?


“SK Bioscience, unlike other general bio firms, has already delivered solid earnings. Its enterprise value may rise even more depending on the progress of its vaccine development and production,” said a securities industry official.

The securities industry estimates SK Bioscience's enterprise value to top 5 trillion won.

The company has received an A- credit rating from credit rating agencies Korea Ratings Corp. and NICE Investors Service Co. The company's rating is unlikely to drop in the mid to long term, thanks to its leading market position and high profitability. 

Industry watchers are also closely eyeing SK Bioscience to see if it’ll exceed the valuation of SK Biopharmaceuticals Co., which had a successful trading debut last year.

SK Biopharmaceuticals’ market capitalization stood at 3 trillion upon listing, but now exceeds 11 trillion won. The company's IPO raised around 959.3 billion won and pulled in 31 trillion won in subscription deposits. SK Group affiliates will be hitting two home runs in a row if the SK Bioscience IPO is another success.

Write to Jong-woo Kim at jongwoo@hankyung.com

Danbee Lee edited this article.

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