SK Holdings rallies on strong performance of two biotech subsidiaries

2020.05.21 15:19:00 | 2020.05.21 15:19:45

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SK Holdings’ share price gained nearly 3 percent Thursday afternoon on news its CMO arm SK Pharmteco will provide Virginia-based Phlow with active pharmaceutical ingredients (APIs) through Pharmteco’s U.S. subsidiary Ampac Fine Chemicals to offset supply shortfall in essential medicines in the U.S.,

Ampac is one of the strategic partners to the U.S. public benefit drug manufacturing corporation, which recently received federal government funding of $354 million for advanced manufacturing of America’s most essential medicines at risk of shortage, including those for the COVID-19 response. The total contract value awarded to Phlow is up to $812 million.

Phlow will use APIs from Ampac to produce and stock up essential medicines including those to treat hospitalized patients with COVID-19.

SK Holdings has been enjoying a string of upsides. Its drug development arm SK Biopharmaceuticals scored an FDA nod for its novel anti-epileptic drug early last week.

SK Holdings has run pharmaceutical and bioscience business around the two wholly owned subsidiaries.

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SK Pharmteco was organized last year as a consolidated body of SK’s CMO facilities that include an Ireland plant acquired from BMS and Ampac plants in the U.S.

Ampac has plants in Virginia, California, and Texas, and it is planning to expand production facilities in Virginia for the U.S. project.

SK Pharmteco joined the project to boost its standing in public bid as a new CMO player. SK Pharmteco expects its proven track record in the regulatory landscape of pharmaceutical products to lead to winning more orders from its potential customers who are generally large pharmaceutical companies around the world.

SK Pharmteco generated 133.1 billion won ($108.1 million) in first-quarter sales and 55 percent from which came from the U.S. and 39 percent Europe.

SK Holdings’ share price has rallied this month on several encouraging news developments, including SK Biopharmaceuticals’ entry into a process to go public. If listed, SK Biopharmaceuticals’ market capital is estimated to reach up to 3.8 trillion won.

By Han Ye-kyung and Minu Kim

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