SK Discovery to control affiliates’ entire biotechnology business

SK Discovery Co., an intermediate holding company of South Korea’s third-largest conglomerate SK Group, will take charge of the entire biotechnology and pharmaceutical businesses at its affiliates for efficient management.

According to industry officials on Thursday, SK Discovery will launch a tentatively named Bio Committee to coordinate business plans and set project priorities among bio-related subsidiaries.

SK Discovery, spun off from SK Chemicals Co. in 2017, currently has SK Bioscience Co., SK Plasma Co. and SK Chemicals, SK Gas Co. and construction firm SK D&D under its wing.

Chief executives of bio-related affiliates will participate as members of the committee and support the decision-making process at board meetings, it said.

SK Discovery’s bio business will be separate from that of SK Inc., SK Group’s investment holding company, led by Group Chairman Chey Tae-won.

SK Group has actively expanded its presence in the biopharmaceutical business since Choi Jong-hyun, the younger brother of group founder Choi Jong-kun, took the helm of the conglomerate in the early 1980s.

Since the launch of SK Discovery in December 2017, Chey Chang-won, vice chairman of SK Chemicals, has been leading SK Bioscience and other bio-related affiliates’ activities.

PANDEMIC A BOON FOR SK

SK Group’s biopharmaceutical units have flourished since the outbreak of the COVID-19 pandemic.

SK Bioscience saw its sales revenue soar to 929 billion won ($715 million) in 2021 from 183.2 billion won in 2019.

The company produces COVID-19 vaccines under contract development and manufacturing organization (CDMO) programs for its two global pharmaceutical clients – AstraZeneca plc and Novavax Inc.

Separately, it has also developed its own coronavirus vaccine candidate GBP510, jointly with the Institute for Protein Design (IPD) of the University of Washington.

The company said in June that it obtained the marketing license of the vaccine, dubbed SKY Covione, from the Korean Ministry of Food and Drug Safety. SKY Covione, which has yet to hit the market, is Korea’s first COVID-19 vaccine.

It is also developing GBP410, a diplococcus pneumonia vaccine candidate.

Earlier this year, SK Bioscience said it is seeking multi-billion-dollar mergers and acquisitions to expand its business portfolio from contract manufacturing to gene therapy development.

The Korean vaccine maker said eventually, it aims to develop its own cell and gene therapy medications, including an mRNA vaccine, employed by Pfizer Inc. and Moderna Inc. – a type that uses a copy of a natural chemical called messenger RNA to produce an immune response.

Industry watchers said SK Discovery, with the launch of the bio committee, will likely push for an initial public offering of SK Plasma to raise funds for its bio business expansion.

SK Plasma, a bioscience business unit of SK Discovery, has partnered with TiumBio Co., a Korean rare disease treatment developer, for joint projects. As a strategic investor, it has also invested in Curocell Inc., a Korean gene therapy company.

Write to Jeong-Min Nam at peux@hankyung.com
In-Soo Nam edited this article.