SK Inc. Acquires French CMO Company to Strengthen Bio Business

[Asia Economy Reporter Choi Dae-yeol] SK Inc. announced on the 31st that it has acquired Epos케시, a French contract manufacturing organization (CMO) specializing in gene and cell therapy (GCT) active pharmaceutical ingredients. This comes just over four months after it disclosed entering exclusive acquisition negotiations in December last year.

Gene and cell therapies are personalized treatments involving the injection of genes or cells, and are expected to be a rapidly growing sector within biopharmaceuticals. The company stated that these therapies show curative effects with just one or two administrations, leading to high growth despite their high cost. Due to the need for advanced technology and specialized personnel, this field is considered difficult to enter except for a few leading global CMO companies.

On the day of the announcement, an online commemorative ceremony was held to finalize the acquisition of a 70% stake in Epos케시, including management rights, attended by SK Inc. President Jang Dong-hyun and Fr?d?ric Reba, CEO of Genetone, a major shareholder of Epos케시. Genetone is a leading French non-profit research institute for genetic diseases and a founding member of Epos케시. The company also noted that Epos케시’s labor union and employees supported the sale, resonating with SK’s management philosophy and commitment to fostering the bio CMO business.

President Jang said, "We are pleased to enter the promising growth area of gene therapy CMO business," adding, "We will spare no effort to support Epos케시’s rapid growth in the global market." Fr?d?ric Reba also stated, "With SK Inc. joining, the commercialization of gene therapies, a key challenge for Epos케시, as well as efforts for technological innovation, will accelerate," and "The rare disease treatments we are developing will be made available to more patients."

This acquisition marks SK Inc.’s third global merger and acquisition (M&A) in its CMO business. SK Inc. acquired BMS’s Swords plant in Ireland in 2017 and the U.S. company Ampac the following year. It has successfully completed a series of cross-border deals targeting overseas companies, which are rare in the domestic pharmaceutical and bio industries. Epos케시 will be acquired through SK Pharmteco, an integrated CMO corporation established in Sacramento, USA, and a subsidiary of SK Inc.

With the acquisition of Epos케시, SK Inc. has established a global CMO business system that includes both synthetic pharmaceuticals and biopharmaceutical CMO sectors. The company expects to supply innovative new drugs to global markets including the U.S., Europe, and Asia. SK Biopharm has built a bio-pharmaceutical value chain by producing synthetic and bio active pharmaceutical ingredients alongside new drug development. The strategy is to differentiate from competitors by focusing investment on innovative new drug development and contract manufacturing businesses with high technological barriers, expanding into high value-added bio CMO businesses that are difficult to enter.

The gene and cell therapy sector accounts for about half of the approximately 1,800 biopharmaceuticals under clinical development annually in advanced countries. According to Deloitte reports and others, the gene and cell therapy market is expected to grow at an average annual rate of 25% until 2025, surpassing antibody therapies, currently the largest market among biopharmaceuticals.

Founded in 2016, Epos케시 possesses platform technology for producing gene delivery vectors. With this investment, Epos케시 will accelerate its ongoing facility expansion, doubling its production capacity to become the largest gene and cell therapy manufacturer in Europe. Genetone, a major shareholder and key client, has world-class gene research capabilities, having played a central role in the human genome mapping research in the 1990s. It is developing gene therapies for rare diseases with no current treatments, such as muscular dystrophy, congenital immune deficiencies, and rare liver diseases. Even after acquisition by SK Inc., Genetone will remain a shareholder of Epos케시 and share a long-term vision with SK Inc., dedicating itself to gene therapy research, development, and production.

Meanwhile, SK Pharmteco, established as an integrated corporation combining Korea (SK Biotech), Ireland (SK Biotech Ireland), and the U.S. (Ampac), recorded sales of 700 billion KRW last year, about seven times the 2016 pre-global expansion level, thanks to integrated operational synergies and COVID-19 related demand. The company expects to achieve 1 trillion KRW in sales within 2 to 3 years. It has risen to the global top 5 in securing orders for synthetic new drug active pharmaceutical ingredients. The company aims to go public in 2023.

Lee Dong-hoon, head of SK Inc.’s Bio Investment Center, said, "By 2025, we will complete the value chain of synthetic and bio pharmaceutical CMO businesses at major hubs in the U.S., Europe, and Asia," adding, "We will nurture SK Pharmteco into a global leading CMO capable of supplying both synthetic and bio innovative new drugs to the worldwide pharmaceutical market."

This content was produced with the assistance of AI translation services.