SK Biopharm Acquires US Proteovant to Secure Targeted Protein Degradation Technology

Acquired for 62 Billion KRW... Secured 60% Stake
Established Research Hub in the U.S.

SK Biopharm is acquiring the U.S. biotech venture Proteovant Sciences. Proteovant is a joint venture between SK Inc. and Roivant, and through this acquisition, SK Biopharm will secure targeted protein degradation (TPD) technology and a research base in the United States.

SK Biopharm CI. [Image provided by SK Biopharm]

On the 30th, SK Biopharm announced that it decided to acquire 40 million shares, equivalent to 60% of Proteovant’s stake, from Roivant for $47.5 million (approximately 62 billion KRW). The scheduled date for the acquisition is July 17, and the two companies plan to sign the transfer agreement in early next month. The amount used for the acquisition corresponds to 19.6% of SK Biopharm’s equity based on last year’s consolidated financial statements.

Proteovant is a joint venture established in 2020 by SK Inc. and the U.S. biotech venture Roivant, and SK Biopharm explained that it has global competitiveness in the TPD field. TPD is a technology that uses the body’s protein degradation system to eliminate proteins that cause diseases. Previously, new drugs were developed by inhibiting protein functions, but this method had limitations as only some disease-causing proteins could be developed into new drugs. In contrast, TPD degrades proteins, offering the advantage of developing any protein into a therapeutic agent.

At the time of the joint venture’s establishment, SK Inc. invested $200 million (approximately 220 billion KRW) to secure a 40% stake in Proteovant. The remaining 60% stake was held by Roivant, but with SK Biopharm purchasing this stake, SK Inc. and SK Biopharm will now hold the entire stake in Proteovant. Combining the amount SK Inc. invested at the time of the joint venture’s establishment and the funds SK Biopharm used for this acquisition, approximately 280 billion KRW has been spent on acquiring Proteovant.

SK Biopharm’s move to acquire Proteovant is aimed at securing TPD new drug development platform technology. The company explained that through this acquisition, it will secure targeted protein degradation technology while also establishing a research base. Earlier, SK Biopharm presented R&D innovation and modality expansion as growth strategies in 2021. Ji-Young Jung, Chief Financial Officer of SK Biopharm, stated, "We judged that now is the right time to proactively secure global-level new drug development platform-related technology at a reasonable price within the available investment resources and long-term affordable cost levels." She added, "Targeted protein degradation technology is one of the fields recognized as having the greatest potential among new drug development modalities. Through this acquisition, we have secured global-level TPD platform-related technology and a research base in one go."

SK Biopharm also explained that there is no problem with the financial capacity to operate Proteovant after the acquisition. CFO Jung said, "SK Biopharm currently holds about $75 million (approximately 100 billion KRW) in cash, so it will be possible to operate Proteovant for more than two years without additional capital injection."

However, since SK Biopharm will become the largest shareholder of Proteovant, it is expected that the subsidiary will be consolidated and have some impact on the company’s performance. From the time of the management rights acquisition, Proteovant’s performance will be reflected in SK Biopharm’s consolidated financial results. SK Biopharm recorded an operating loss of 131 billion KRW last year, turning to a deficit compared to the previous year. The company has set a goal to return to profitability in the fourth quarter of this year.

CFO Jung said, "We expect some partnering revenue in the fourth quarter, so we will maintain the existing goal of turning a profit on a quarterly basis in Q4," adding, "Through R&D project efficiency improvements and collaboration with our existing U.S. subsidiary SK Life Sciences, we plan to keep the total annual costs below $30 million (approximately 4 billion KRW), which is slightly over 10% of selling and administrative expenses." The costs related to the acquisition of Proteovant are expected to be reflected in the third quarter.

Meanwhile, SK Biopharm plans to hold a briefing session in mid-next month to announce new mid-to-long-term growth strategies and new product launch plans.

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