Aprogen, which raised investors’ expectations by announcing acquiring a drug manufacturing facility in the U. S., has reversed the announcement and abandoned its acquisition.

“In these times of global business slump, we thought the investment risk would increase sharply and decided not to push for the acquisition of the U.S. plant,” the company said in a public notice on Wednesday.

According to Aprogen, the company submitted its first bidding proposal for the acquisition of the plant to the U.S. lead manager on Oct. 27 and has since inquired into the possibility of its acquisition through due diligence.

“As a result of our examination, we concluded that there is uncertainty as to the time when the plant’s acquisition contributes to enhancing shareholder value when considered from various viewpoints, such as the potential value of the commercial contracts the plant currently has, the facility’s excellence and utilization ratio, the possibility of facility expansion and consequent investment scale, and its observance of environmental regulations,” it said.

However, such explanations run counter to the company's announcement when it first unveiled a plan to acquire the plant, market watchers pointed out.

By disclosing the plant information at the time, Aprogen repeatedly emphasized the effects the planned acquisition would have on the company.

In a news release on Oct. 6, Aprogen first revealed its intention to acquire a U.S. cGMP (current Good Manufacturing Practice) plant that had won the approval of the U.S. Food and Drug Administration.

According to Aprogen, the plant is located in a site area of 230,000 square meters (about 70,000 pyong) in North Carolina. It added that about 80 percent of the area remains idle, making it possible to build a research center.

In addition, the plant is fully equipped with the facility to manufacture antibody drugs, synthetic drugs, and finished injections. The company also stressed at the time that foreign drugmakers, including U.S. and Danish companies, were manufacturing liquid and freeze-dried preparations of finished medicinal products.

Aprogen explained that the planned acquisition was to respond to President Joe Biden’s executive order on “national bioengineering and biomanufacturing initiative.” It then added that it would produce materials for new drugs and biosimilars at its Korean plant and turn out finished products in the U.S. plant.

Besides, the company said it would pay the purchase price with newly issued shares instead of cash, posing little burden on its finances.

However, the company immediately reversed its position after announcing a plan to acquire the U.S. plant.

Explaining its position in response to some media reports on the day it distributed the press release, Aprogen said, “Although we are examining various strategies to secure competitiveness in the U.S. biopharmaceutical market, including the acquisition of a local plant, nothing has been decided yet concretely.”