SK biopharmaceuticals has decided to acquire Proteovant Sciences, a joint venture established in the U.S.
The company said in a public filing Friday that it would acquire 40 million shares of Proteovant valued at about 62 billion won ($47.5 million). SK biopharmaceuticals will acquire the shares with cash on July 17.
Upon the completion of the equity acquisition, SK biopharmaceuticals will hold a 60 percent stake in Proteovant. Proteovant is a joint venture established by SK and Roivant in March 2020. Lee Dong-hoon, the incumbent CEO of SK biopharmaceuticals, was also involved in the founding of Proteovant while he worked at SK.
SK biopharmaceuticals said the acquisition aims to secure Proteovant’s global-level targeted protein degradation (TPD) technology.
“In line with the SK Group’s new management philosophy of 'Financial Story,' we have secured global-level TPD technology and a U.S. research base through the acquisition of Proteovant," an SK biopharmaceuticals official said.
The Financial Story, a management philosophy emphasized by SK Group Chairman Chey Tae-won, refers to a company's growth story with goals and action plans.
“We have decided to acquire 40 million shares (60 percent of the total) held by Roivant, the largest existing shareholder. If there are no special problems, the acquisition will be completed on July 17,” said Cheong Ji-young, head of SK biopharmaceuticals' financial team, in a conference call following the announcement.
The company emphasized that there would be no external financing for the acquisition.
"About 50 people are working on technology development and discovery-stage tasks, and we expect the annual cost of less than $30 million (39.6 billion won) after the acquisition,” Cheong said while explaining about Proteovant. “We have about $75 million in cash, and so we can operate for more than two years without additional funding."
Cheong went on to say, “The Financial Story we announced in 2021 includes innovation in our R&D platform, namely modality expansion. We have been exploring the possibilities mainly through collaborations in Korea. With this acquisition, we have a global-level TPD platform technology."
Cheong said that the company would unveil the Financial Story of its new mid- to long-term growth strategy, which it had prepared since the beginning of this year, at a media event in mid-July.
“Once the schedule is finalized, we will inform you in advance and disclose the announcement through our website on the same day, keeping in mind the process disclosure,” Cheong added.
Jung Koo-min, director of SK biopharmaceuticals' New Drug Research Center, said, “TPD technology uses the body's proteolytic system to eliminate target proteins that cause diseases. Proteovant is working on many projects through a bifunctional molecular technology platform known as ‘PROTAC’ and is building a molecular glue platform technology.”
Director Jung went on to say, “Targeted proteolysis is an emerging modality that is gaining increasing interest due to its potential to expand into areas inaccessible to existing therapies and overcome resistance. It is a suitable expansion area for SK Biopharm, which has global drug development capabilities with synthetic drugs.”