SK Pharmteco to raise $500 mn in pre-IPO, aims for 2025 listing

SK Pharmteco Co., South Korean conglomerate SK Group’s contract development and manufacturing organization (CDMO), is set to raise $500 million by selling a stake to a local private equity firm in pre-initial public offering funding with a targeted 2025 listing to develop future growth sectors and expand its global business.

“SK Pharmteco plans to accelerate the global business currently centered on the US and Europe while improving competitiveness in the cell gene therapy it seeks as a new growth engine through the fundraising,” said its parent company SK Inc. in a statement on Tuesday. The CDMO subsidiary also aims to secure technology for rapidly growing innovative treatment sectors such as antibody-drug conjugates (ADCs).

SK Inc. selected Seoul-based Brain Asset Management Co. as a preferred bidder for the fundraising, adding the asset manager offered the best options for the CDMO’s long-term development including investment size and conditions, as well as strategies as a business partner. Brain beat out competitors including IMM Private Equity, Stonebridge Capital and Corstone Asia in the final bidding for the deal.

Brain is set to secure about a mid-10% stake in SK Pharmteco once the pre-IPO deal, which estimated the biotech company at some 4 trillion won ($3.2 billion), is finalized.

To finance the deal, Brain plans to use an existing blind fund of 300 billion won prepared for its overseas investments and set up a project fund for the remainder. The PE firm has already received letters of commitment from institutional investors in South Korea.

The asset manager has been investing in the bio sector including companies with cell therapy technology since 2015.

TARGETS 2025 IPO

SK Pharmteco plans to help Brain exit from the planned investment through a listing in 2025, which is set to mark the third IPO of SK Group’s bio units. SK Biopharmaceuticals Co. and SK Bioscience Co. went public in 2020 and 2021, respectively.

SK Inc. pledged to guarantee the principal and internal rate of return of some 6% per annum to Brain in case of SK Pharmteco’s listing failure.

SK Inc. in 2017 acquired from Bristol Myers Squibb Co. a plant for small molecule active pharmaceutical ingredients in Ireland to expand the contract development and manufacturing business. In 2018 SK Inc. took over AMPAC Fine Chemicals, a US CDMO, to establish its global production system.

The SK Group investment holding company founded SK Pharmteco in 2019 to create synergy by combining those production units in the US and Europe, as well SK Biotek Co.'s facilities in South Korea.

SK Pharmteco made inroads into the cell and gene therapy sector as SK Inc. acquired Yposkesi, the French clinical and commercial viral vector company, in 2021 and invested $350 million in the Center for Breakthrough Medicines, a US-based cell therapy developer, in 2022.

SK Pharmteco currently operates seven production facilities in the US, Europe and South Korea, as well as five research centers.

Write to Jun-Ho Cha and Jong-Kwan Park at chacha@hankyung.com
 
Jongwoo Cheon edited this article.