SK Pharmteco to raise up to $498 mn on $5 bn valuation

SK Pharmteco, a contract development and manufacturing organization (CDMO) for pharmaceuticals, is slated to raise 400 billion ($332.2 million) to 600 billion won ($498.3 million) in pre-initial public offering funding. The CDMO, wholly owned by South Korean conglomerate SK Group’s holding company SK Inc., plans to go public on Korea’s secondary bourse Kosdaq or the Nasdaq in 2023.

SK Pharmteco has told some global investment banks it will select a book-runner for the pre-IPO by the end of January, according to IB sources on Jan. 7.

The corporate value and the pre-IPO funding size have not been set yet, although some market watchers say it could be valued up to 6 trillion won ($5 billion). The CDMO and the holding company will estimate the corporate value after discussions with some global IBs. The holding company is in talks with some global private equity firms under the table for the pre-IPO investment, the sources said.

Headquartered in California, SK Pharmteco was founded in 2019 as a combined entity of three active pharmaceutical ingredients (APIs) manufacturers -- SK Biotek Korea, SK Biotek Ireland and AMPAC Fine Chemicals (AFC) LLC. The company is specialized in the manufacture of APIs and intermediates, viral vectors for gene and cell therapies. Its sales in 2020 and 2021 were around 710 billion won and slightly less than 1 trillion won, respectively.

It has increased the corporate size through acquisitions of global CDMOs. In February of 2021, SK Pharmteco acquired a 70% stake in French viral vector manufacturer Yposkesi. The French company started its plant expansion last June. The expanded facility, sized 10,000 square meters, will be the largest gene and cell therapy manufacturing facility in Europe in 2023. Last November, SK Pharmteco said it is in exclusive negotiations with The Center for Breakthrough Medicines (CBD), a Philadelphia-based gene and cell therapy CDMO, to invest in the US company.

SK Pharmteco is boosting its presence on the global stage. The CDMO will attend the 40th Annual J.P. Morgan Healthcare Conference next week with other Korean pharmas, including Samsung Biologics and HK inno. N, and deliver a presentation to appeal to global investors.

The IPO could raise SK Pharmteco’s value to more than 10 trillion won if the company makes a meaningful achievement to cell and gene therapies, Yuanata Securities Korea analyst Choi Nam-gon said in a recent report. Lee from SK’s bio investment center said the global cell and gene therapy market size will grow as much as 25% every year until 2025, reaching 120 trillion won in that year.

Write to Jun-ho Cha and Ye-jin Jun at chacha@hankyung.com
Jihyun Kim edited this article.