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SK Bioscience’s Strategic Expansion Amidst Endemic Challenges

South Korea
s 302440.KO s 285130.KO Mid and Small Cap 2000
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In the third quarter, SK Bioscience reported sales of KRW 231.8 billion, a remarkable 154% surge compared to the same period last year, accompanied by an impressive 185.3% increase in operating profit (KRW 60.9 billion). This marked the first surplus in three quarters since the transition to the endemic phase. The company attributes this success to re-entry into the flu vaccine market, augmented shingles vaccine sales, and the conclusion of the COVID-19 vaccine contract manufacturing (CMO) deal with Novavax.

SK Bioscience is surging forward, strategically investing to secure a prominent position in the global vaccine landscape. As the world grapples with the shift of infectious diseases into endemic phases, the company is proactively seeking avenues for growth through an expanded vaccine portfolio, licensing agreements, and mergers and acquisitions.

Prioritizing long-term growth over short-term gains, SK Bioscience plans to invest approximately KRW 2.4 trillion over the next five years. This commitment represents a fivefold increase from its investments since becoming independent from SK Chemicals in 2018. Notably, half of this investment, totaling KRW 1.2 trillion, will be allocated to research and development (R&D).

SK Bioscience has already achieved significant milestones, including the development of ‘SkyCellflu’, the world’s inaugural quadrivalent cell culture flu vaccine, and ‘SkyZoster’, the second shingles vaccine globally. Additionally, the company successfully bid for the procurement of a chickenpox vaccine by the Pan American Health Organization (PAHO). Among its notable achievements is the production of ‘Sky Varicella’, the first domestically manufactured COVID-19 vaccine, known as ‘Skycovione’.

The company is focusing its R&D efforts on a range of vaccines, designating them as the ‘five major blockbusters’. This includes the next-generation pneumococcal vaccine, a collaborative effort with global pharmaceutical leader Sanofi. Recently completing phase 2 clinical trials, this vaccine is poised to offer broader prevention capabilities compared to existing market offerings.

Through the ‘Glocalization’ initiative, SK Bioscience aims to bolster global vaccine infrastructure. This project entails transferring technology to nations lacking vaccine production capabilities, enabling local production and supply. Notably, the company entered a pact with GPO, a Thai state-run pharmaceutical entity, to locally supply flu vaccine concentrates until August 2033.

SK Bioscience’s foray into the ‘Songdo Era’ involves substantial facility investments, culminating in a cutting-edge ‘Global Research and Process Development (R&PD) Center’ in Songdo, Incheon, set for completion in 2025. This center will encompass the entire process from research to commercial production, solidifying the company’s global competitiveness in contract development and manufacturing (CDMO).

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