SK Bioscience aims to be dominant player in global vaccine industry

SK Bioscience's vaccine center, located in Andong, North Gyeongsang Province / Courtesy of SK Bioscience

SK's CDMO arm expects double-digit growth in global vaccine market

By Anna J. Park

Ahead of its upcoming IPO next month, SK Bioscience, a subsidiary of SK Chemicals focusing on developing and manufacturing vaccines, vows to grow into a major vaccine player in the global market.

According to the firm's CEO, Ahn Jae-yong, during Tuesday's online press conference, the company expects to register a quantum leap in the near future in its annual revenues as well as profits. The CEO explained that the biopharmaceutical company recorded around 200 billion won ($180 million) in annual revenue in 2020, yet given the firm's continuous double-digit growth rate, it is only the start of solid advancement.

"The company surpassed the breakeven point back in 2018, and the firm's revenue growth has been recording around 23 percent a year since then," CEO Ahn said during the press conference.

The offering price of the firm's stocks is currently set between 49,000 won and 65,000 won, and it will be officially determined after conducting a stock allotment subscription survey of local and foreign institutional investors for two days, on March 4 and 5.

Retail investors can register for stock allotment on March 9 and 10 at brokerage firms. The company's debut on the benchmark KOSPI will come sometime around mid-March.

The contract development and manufacturing organization (CDMO) affiliate of SK will offer 22.95 million shares through the IPO process, hoping to raise approximately 1.49 trillion won in capital.

CEO Ahn said that the company plans to spend around a quarter of this raised capital on research and development to maintain and strengthen its status as one of Asia's most significant vaccine developers and manufacturers. Another 400 billion won is earmarked for facility investment, and 100 billion won more will be used for vaccine platform technology. The rest will be used on other business priorities.

"The company hopes to be a dominant player in the entire process of the vaccine industry from R&D, manufacturing and distribution to sales," Ahn said during the press conference.

He stressed that the current COVID-19 situation has expanded the global vaccine market for the time being as well as in the foreseeable future. He explained that SK Bioscience's stable growth will be maintained, due to high entry barriers to the vaccine market. A newcomer typically needs at least five to seven years of preparation as well as hundreds of millions of dollars in capital.

"While the global vaccine market is estimated to be around 50 trillion won, coronavirus pandemic vaccines are expected to grow into a market size of around 10 trillion won to 15 trillion won, and the global vaccine market is expected to log a double-digit growth rate in the near future," the CEO said.

The CEO highlighted that the global pandemic has changed the landscape of the global vaccine industry, as it allowed a close and active partnership among vaccine developers and manufacturers to fight against common diseases. This strengthened partnership business model will affect SK Bioscience's outlook favorably, as it has a solid footing as a prestigious CDMO firm in Asia.

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