SK invests $350 million in US gene therapy company, becoming second-largest shareholder

CDMO Integrated Corporation SK Pharmteco Completes Investment Negotiations with CBM
Cell and Gene Therapy CDMO Expands to the US Following France

Discovery Lab located in Silicon Valley, Philadelphia, USA, where CBM is based

[Asia Economy Reporter Choi Dae-yeol] SK Inc. announced on the 9th that it has become the second-largest shareholder by investing $350 million (approximately 420 billion KRW) in the U.S. active pharmaceutical ingredient contract development and manufacturing organization (CDMO) CBM (The Center for Breakthrough Medicines).

As a company specializing in cell and gene therapy (CGT), SK expanded into the U.S. just nine months after acquiring the French company Iposkesi in March last year. This investment was made through SK’s integrated CDMO subsidiary, SK Pharmteco. The company explained that this move brings them closer to their goal of growing into a global leading CDMO producing both synthetic bio new drugs and innovative bio new drugs in major pharmaceutical markets worldwide, including the U.S., Europe, and Asia. In terms of synthetic pharmaceuticals alone, SK has established production systems in the U.S., Europe, and Korea, securing a position among the top five companies by sales.

Cell and gene therapies are innovative personalized treatments involving the injection of genes or cells. They are known to achieve near-curative effects for rare diseases caused by genetic defects with just one or two gene injections. According to Deloitte, the market is expected to grow at an average annual rate of about 25% until 2025. CBM possesses R&D capabilities covering the entire process from handling key raw materials for CGT to the final finished products. Plasmids, considered essential raw materials for CGT, have recently gained attention as the main raw material for messenger RNA (mRNA) used in COVID-19 vaccines.

Organizational chart of SK's Synthetic and Bio Business Division. Centered around SK Pharmteco, a global Contract Development and Manufacturing Organization (CDMO), research and development as well as contract development and manufacturing organizations are established worldwide.

CBM plans to build CGT facilities covering 700,000 ft² (20,000 pyeong) by 2025, making it the largest in the world. The company also plans to hire about 2,000 professionals over the next four years. CBM is located in Philadelphia Silicon Valley, the only CGT-specialized bio-cluster in the U.S. SK expects this location to be advantageous for business expansion due to the concentration of nearby universities, hospitals, pharmaceutical companies, and experts.

SK has been rapidly strengthening its position by consecutively acquiring BMS’s Swords plant in Ireland in 2017, Ampac in the U.S. in 2018, and Iposkesi last year. Brian O’Neill, founder and chairman of CBM’s board, said, "I believe the collaboration between the two companies will greatly contribute to the approval and commercialization of thousands of new therapies." Lee Dong-hoon, head of SK Inc.’s Bio Investment Center, stated, "We will focus on nurturing the bio CDMO business to become the world’s number one CGT therapy CDMO."

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