SK chemicals signs distribution and marketing deal with Viatris Korea for three drugs

SK chemicals said it entered into a distribution and marketing agreement with Viatris Korea for three pharmaceutical products -- Celebrex for pain and inflammation associated with arthritis, Lyrica for neuropathic pain, fibromyalgia, and epilepsy, and Neurontin for epilepsy and nerve pain.

According to a regulatory filing on Tuesday, SK chemicals will oversee distribution to all hospitals and manage marketing for hospitals with fewer than 300 beds, while Viatris Korea will handle marketing for larger hospitals with over 300 beds.

The financial details of the contract remain undisclosed due to confidentiality agreements. However, SK chemicals stated that the contract value is expected to exceed 2.5 percent of 2023 sales.

Considering SK chemicals posted sales of 1.74 trillion won ($1.1 trillion won) in 2023, the contract value is expected to be over 43.7 billion won.

The company plans to disclose the contract amount once the confidentiality clause is lifted or the disclosure period elapses, which is set for Dec. 31, 2027.

These three drugs were previously under the exclusive sales rights of Jeil Pharmaceutical for the past two decades.

According to Jeil Pharmaceutical’s financial reports, the combined sales of these drugs reached 99.8 billion won as of the third quarter of last year.

Last year, SK chemicals’ pharmaceutical division reported an annual revenue of 357.3 billion won, marking a 5 percent decline compared to the previous year. Its operating profit also dropped significantly to 19.2 billion won, a sharp 39 percent decrease from 2021. In response, the company recently reversed its decision to sell its pharmaceutical division and has been actively pursuing cooperative marketing strategies to drive external growth.

With this deal, SK chemicals anticipates maximizing synergy with its existing portfolio, including its flagship pain relievers Joins and Ultracet. Joins, an osteoarthritis treatment, and Ultracet, a non-narcotic anti-inflammatory analgesic exclusively marketed by SK chemicals, are frequently used in combination therapy with the three Viatris products. The company expects these synergies to generate mutual product enhancement and overall business growth.

"By introducing Lyrica, Neurontin, and Celebrex, we can offer patients and healthcare professionals a wider and more effective range of pain management options,” SK chemicals Pharma Planning Office head Park Hyun-sun said. “Moving forward, we will continue to secure new pipelines closely aligned with our existing business and strengthen our expertise in specialized markets such as pain management."