Lotte Biologics is accelerating the construction of its production facility and officially launching its contract development and manufacturing organization (CDMO) business, which encompasses a diverse range of modalities, including antibody drugs and antibody-drug conjugates (ADCs).

Industry attention is focused on whether it can secure significant global contracts beyond its recent contract wins in Syracuse, New York.

Lotte Biologics held a structural completion ceremony for the first plant of its Songdo Bio Campus at the Songdo International City Advanced Industry Cluster in Incheon last Tuesday.

Key executives, including CEO James Park; Shin Yoo-yeol, head of Global Strategy and Future Growth at Lotte Holdings; Vice Chairman and CEO Park Hyun-cheol of Lotte Engineering & Construction; and Kim Jin, head of the CM Business Division at Lotte Engineering & Construction, attended the event, demonstrating the group's commitment to its bio business.

The Songdo Bio Campus will consist of three plants, each with a production capacity of 120,000 liters. Among these, the first plant, focused on antibody drug production, is scheduled for completion this year, with commercial production targeted for the first half of 2027. Upon completion of Plant 1, combined with the existing 40,000-liter production capacity at the Syracuse Bio Campus in the U.S., the company will secure a total global production capacity of 160,000 liters.

The company's strategy is to create synergies through dual-site operations in Syracuse and Songdo. Syracuse is envisioned as a “one-stop CDMO hub, from antibodies to ADCs,” while Songdo will serve as a large-scale commercial production hub.

Established in 2021, Lotte Biologics has yet to generate revenue beyond the orders secured from BMS for the Syracuse plant. Although it signed three contracts this year, the specific scale of these contracts remains undisclosed, making it difficult to consider them meaningful wins.

Nevertheless, investment expansion continues. Beyond constructing the Songdo Bio Campus facilities, the company invested approximately $100 million in March to complete an ADC production facility at the Syracuse Bio Campus. This investment expansion has widened the deficit. While it recorded an operating profit of 26.6 billion won ($19.1 million) in 2023, it posted an operating loss of 80.1 billion won in 2024.

The key factor is the order-receiving performance of CEO James Park, now in his ninth month in office. Lotte Group has provided financial support since his appointment. In March this year, a rights offering worth approximately 210 billion won was executed, based on full-scale group-level support from Lotte Holdings (80 percent) and Japan's Lotte Holdings (20 percent).

“Lotte Biologics still lacks a global track record, so it's highly likely they'll initially adopt a strategy of accepting losses to build order performance, even at lower prices,” an industry executive said. “The core task will be for CEO James Park to leverage group-level financial backing to actively pursue global orders and subsequently secure appropriate price competitiveness.”