The contract manufacturing organization (CMO) businesses concerning the Covid-19 vaccine undertaken by Korean pharmaceutical companies are showing mixed results.

Korean pharmaceutical companies’ contract manufacturing organization (CMO) businesses concerning the Covid-19 vaccine are showing mixed results.
Korean pharmaceutical companies’ contract manufacturing organization (CMO) businesses concerning the Covid-19 vaccine are showing mixed results.

While the subsidiaries of large conglomerates, such as Samsung Biologics and SK Bioscience, are manufacturing Covid-19 vaccines, independent drugmakers, including GC and Huons Global, have given up their Covid-19 vaccine CMO business.

Besides, business uncertainty continues in Hanmi Pharmaceutical and GL Rapha Consortium, according to industry watchers.

GC said it stopped discussing a CMO deal with Johnson & Johnson for the latter's Covid-19 vaccine last December, four months after the company began the negotiation.

Last Friday, Huons Global also said that it had discontinued the CMO of the Sputnik V vaccine, a Covid-19 vaccine developed by Russia, due to the Russian invasion of Ukraine and Russia's economic sanctions against Korea.

"The Russian government named Korea an 'unfriendly' nation last Monday and is expected to impose various restrictions on Korea, including diplomatic ones," Huons Global said. "Even before that, concerns had risen about our business continuity due to international sanctions against Russia."

Given the unstable international situation, the company judged that it would be impossible to maintain its contract, the company said.

Industry insiders expected the Covid-19 vaccine CMO business of Hanmi Pharmaceutical and GL Rapha Consortium to fall through soon.

As Genexine applied for the withdrawal of its phase 2 and 3 clinical trials of GX-19N, a Covid-19 vaccine candidate, in Indonesia last Friday, Hanmi may have to drop its plan to produce vaccines for Genexine.

"We haven't received any official notice from Genexine yet. However, now that Genexine has withdrawn its clinical trial plan for the vaccine, it is safe to say that our contract with Genexine has also ended," a Hanmi official said to Korea Biomedical Review.

Last May, the two companies signed a contract to develop the GX-19N production process and product manufacturing worth 24.5 billion won ($21.6 million) and form a partnership for the global commercialization of GX-19N.

However, the Hanmi official pointed out that the contract signed was a memorandum of understanding (MOU), not a formal contract. "At the time, we agreed to discuss more details of the agreement after Genexine received approval for the vaccine," the official said.

GL Rapha Consortium has reportedly not decided yet whether to continue its CMO agreement with the Russian Direct Investment Fund (RDIF) to produce the Sputnik V.

However, considering that Huons Global, who had a similar deal with RDIF, recently terminated its CMO agreement, industry insiders predicted that GL Rapha Consortium could hardly proceed with its deal.

"Even when excluding global sanctions against Russia and Russia's sanction against Korea, it will not be easy for GL Rapha Consortium to continue its CMO agreement due to the negative global sentiment toward conducting business in Russia," an industry insider said, asking to remain anonymous due to the sensitivity of the issue.

In contrast to the struggle of independent drugmakers, companies affiliated with large conglomerates have shown impressive results in their CMO business concerning Covid-19 vaccines.

Korean companies are producing the Covid-19 vaccines of Moderna, AstraZeneca, and Novavax.

Samsung Biologics is supplying Moderna's Covid-19 vaccine domestically and internationally after the two companies signed a CMO contract last May.

Samsung Biologics plans to pursue CMO contracts for other mRNA vaccines as well. For example, it has signed a CMO contract with Greenlight Bioscience to manufacture the raw material for its Covid-19 mRNA vaccine and is about to start production in the second quarter.

SK Bioscience is manufacturing and supplying Novavax's vaccine worldwide. While the company had also manufactured and supplied AstraZeneca's Covid-19 vaccine, the CMO agreement ended in December.

SK Bioscience plans to focus on producing Novavax’s Covid-19 vaccine while trying to commercialize GBP510, a homegrown Covid-19 vaccine. It is analyzing data after completing a phase 3 clinical trial for GBP510.

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