SK Bioscience says ‘national pride’ is preventing China from accepting foreign Covid vaccines

South Korea’s top vaccine maker says it is unlikely to ship Covid vaccines to China even as the country is hit by its biggest outbreak of the pandemic, due to Beijing’s “national pride” and insistence on using domestic vaccines.

In an interview with the Financial Times, SK Bioscience chief executive Jaeyong Ahn said it was “unrealistic” to ship Covid vaccines to China in the near future.

“China is now at the heart of the pandemic. It’s a matter of speed, but it won’t be easy for us to get vaccines there unless there are dramatic talks,” he said, adding it was “about.” [China’s] National Pride and Justification and Science”.

He said SK, which makes Covid vaccines for AstraZeneca and Novavax, is monitoring for any variants emerging from the country.

The World Health Organization has accused China of underrepresenting the severity of its outbreak and the true number of deaths. Beijing has not authorized the use of foreign-made vaccines, saying it has “adequate” stocks of domestically-made vaccines.

SK Bioscience developed its own Covid vaccines last year and received national approval for their use in June. It is now awaiting approval from the WHO and the European Union, which it is expected to receive in the first half of this year.

The company, one of the world’s leading contract manufacturers, has produced a large volume of vaccines for global customers. The company is keen to accelerate its overseas expansion amid rapid growth during the pandemic, with sales quintupling to 929 billion won (US$732 million) between 2019 and 2021.

Ahn said it is currently in acquisition talks with several foreign companies as it seeks to sustain growth in the post-pandemic era by developing new vaccines and expanding into cell and gene therapies.

“We see the best M&A environment in 14 years in terms of valuations, although funding conditions have deteriorated,” he said. “We have the financial firepower and investing well is our most important agenda [item] to increase our company value.”

SK’s share price fell 67 percent last year amid concerns about post-pandemic growth prospects. The drop was partly due to a global biotech lull after stocks in the sector soared to record highs during the coronavirus outbreak in 2021.

Its operating profit more than halved to 106 billion won in the first nine months of 2022, compared with 220 billion won a year earlier, with revenue falling 34 percent year-on-year to 316 billion won, reflecting the maturation of immunization programs in many parts of the developed world.

With its cash stack of 1.5 trillion won, SK is looking for vaccine companies with technologies that can overcome mRNA’s weaknesses, such as B. the need for storage at ultra-low temperatures. It’s also looking for biotechs that can help it expand into anti-cancer cell and gene (CGT) therapies this year, a fast-growing and lucrative field.

“mRNA is an essential technology as we prepare for the next pandemic. Our goal is to close at least one deal each in the mRNA and CGT areas this year,” said Ahn.

SK is keen to acquire an American biotech company to secure manufacturing facilities in the US, while President Joe Biden is pushing to relocate strategically important industries. The company recently established a US subsidiary to gain a foothold in the world’s largest pharmaceutical market.

“The US executive order presents us with both opportunities and risks,” said Ahn. “If we use our liquidity well, it can significantly increase our growth momentum.”

The company, which is struggling with weak domestic demand for its Covid vaccines, hopes it can export to lower-middle-income countries in Africa, Southeast Asia and South America. It plans to promote these deals by offering technology transfer and building manufacturing facilities through local joint ventures. SK Bioscience says ‘national pride’ is preventing China from accepting foreign Covid vaccines

Adam Bradshaw

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