SK bioscience reported a wider operating loss in the second quarter despite revenue surging nearly sixfold, as the Korean vaccine manufacturer continues investing heavily in research and development while struggling to achieve profitability.
The Seoul-based company posted an operating loss of ₩37.4 billion ($26.7 million) for the three months ended June 30, compared with a loss of ₩19.9 billion a year earlier. Revenue jumped to ₩161.9 billion ($115.6 million) from ₩26.8 billion in the same period last year, primarily driven by the consolidation of German subsidiary IDT Biologika, which contributed ₩129.3 billion to total sales.
The results underscore the challenges facing mid-tier vaccine companies as they attempt to scale operations while competing against pharmaceutical giants. Despite the company’s ambitious target of achieving profitability this year with sales exceeding ₩410 billion ($293 million), mounting losses raise questions about the timeline for financial sustainability.
SK bioscience received clinical trial approval in China for its 21-valent pneumococcal conjugate vaccine candidate, GBP410, developed in partnership with Sanofi. The approval allows Phase 1 and Phase 3 trials in the world’s second-largest economy, potentially opening access to a market where pneumococcal disease kills approximately 1.6 million people annually.
However, the company faces stiff competition in the pneumococcal vaccine market, which analysts value at approximately $9.38 billion in 2025 and expect to reach $13.29 billion by 2032. Market leaders Pfizer and GSK dominate with established products, while Pfizer’s 20-valent vaccine Prevnar 20 received FDA approval in April 2023.
The company’s strategy of heavy upfront investment appears to be straining near-term profitability. SK bioscience spent ₩56.6 billion ($40.4 million) on future growth investments in the first half, including ₩33.7 billion for vaccine portfolio expansion and ₩11.1 billion for infrastructure development.
IDT Biologika, acquired in 2024, showed mixed results with revenue increasing due to productivity improvements but operating profit declining due to one-time production costs. The German unit targets an operating profit turnaround by year-end, though such promises have proven elusive for many contract manufacturing organizations.
The company’s domestic vaccine business showed modest growth, with flu vaccine exports expanding to Southeast Asia and the shingles vaccine gaining traction in local government programs. Distribution of Sanofi vaccines in Korea contributed ₩7.7 billion, up 11% year-over-year.
While management touts the China approval as a significant milestone, regulatory clearance represents only the beginning of a lengthy and expensive clinical development process. The company must demonstrate superior efficacy against established competitors while navigating China’s complex healthcare procurement system.
At current spending levels and loss rates, achieving the promised profitability turnaround this year appears increasingly challenging without a dramatic acceleration in revenue growth or significant cost reductions.
