SK Holdings is integrating three pharmaceutical production subsidiaries around the world to pursue advanced contract development and manufacturing organization (CDMO) business.
SK Biopharmaceuticals, a subsidiary of SK Holdings, is also set to release new sleep disorder drug soliamfetol in the U.S., taking steps to become a multinational pharmaceutical firm.
SK Holdings, the holding firm of SK Group, said its board members decided on Aug. 30 to establish SK Pharmteco in Sacramento, Calif., which will combine the three pharmaceutical manufacturing units – SK Biotek in Korea, SK Biotek Ireland, and AMPAC Fine Chemicals in the U.S.
SK Holdings will invest its shares of SK Biotek and the assets transferred from SK Biotek in SK Pharmteco. This will put SK Pharmteco under SK holdings as a sub-holding company to oversee the three manufacturing units.
SK said the move was to streamline the corporate structure of the dispersed production units and to maximize synergies and efficiency. Aslam Malik, CEO of AMPAC Fine Chemicals, has been named to head SK Pharmteco.
After years of mergers and acquisitions, SK has become able to have a globally competitive base for its CDMO business, the company said.
After spinning off SK Biotek in 2015, SK acquired 100 percent stake in the drug producer for 163.8 billion won ($134.6 million), to jump into the biotech industry in earnest.
In 2017, SK bought Bristol-Myers Squibb's manufacturing facility in Ireland. The Irish plant had been producing cardiovascular and hepatitis treatments for BMS and active pharmaceutical ingredients (APIs) for blockbuster diabetes drugs of top-tier clients. It can manufacture 81,000 liters of pharmaceutical products per year.
In the same year, SK also acquired AMPAC, a U.S.-based CDMO for APIs. AMPAC produces APIs for anticancer drugs, central nervous system drugs, and cardiovascular treatments. Its annual production capacity records 600,000 liters. Combined with a 320,000-liter production facility in Korea, SK will have a capacity of 1 million liters a year.
By purchasing the factories of long-term global partners AMPAC and BMS, SK not only maintained deals with existing clients but took a better position to attract new clients.
In CDMO business, it is better to have a massive facility to realize an economy of scale. International CDMOs are competing to pump up their size because the more various raw materials they produce, the bigger orders they can receive.
SK said it plans to increase its production capacity from 1 million liters to the world’s largest after 2020.
SK Biopharmaceuticals won the U.S. approval for soliamfetol, a new drug for a sleep disorder. The company is also seeking the FDA’s nod for another new antiepileptic medicine Cenobamate.
If the company obtains the license for Cenobamate within this year, SK Biopharmaceuticals will solidify its position as a new drug developer, it said.