Moderna Comes to Korea... 'Direct Investment and Contract Manufacturing' Two-Track Approach

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[Image source=Yonhap News]

[Asia Economy Reporters Seo So-jeong and Kim Ji-hee] Moderna, the U.S. pharmaceutical company producing messenger ribonucleic acid (mRNA) COVID-19 vaccines, is set to make a full-scale entry into Korea. The strategy is two-pronged: direct investment in Korea and entrusting domestic companies such as Samsung Biologics with contract manufacturing (CMO) of vaccines, aiming to establish Korea as a foothold for expansion into Asia. In particular, Moderna plans to strengthen facility investment and research and development (R&D) in Korea through direct investment, while partnering with Samsung Biologics, the world’s number one bio CMO manufacturer, to expand its global supply chain.

According to the Blue House on the 14th, the upcoming Korea-U.S. summit scheduled for the 21st will discuss the Korea-U.S. ‘vaccine alliance’ as a major agenda item. It is reported that SK Group Chairman Chey Tae-won, Samsung Electronics Vice Chairman Kim Ki-nam, Samsung Biologics CEO John Rim, and SK Bioscience CEO Ahn Jae-yong are included in President Moon Jae-in’s delegation to the U.S., raising expectations that a vaccine contract manufacturing agreement will be announced during the visit.

Samsung Biologics neither confirmed nor denied reports related to domestic vaccine contract manufacturing on the same day, lending weight to the view that negotiations are underway. Samsung Biologics stated regarding reports on domestic contract manufacturing of Moderna vaccines, "There is currently nothing confirmed, so we cannot verify." This is interpreted as a need to maintain confidentiality with clients typical of CMO companies, especially since negotiations have not been finalized. A senior government official said, "We understand that Moderna has a strong intention to invest directly in Korea, as evidenced by recent recruitment for establishing a subsidiary here," adding, "Besides entrusting CMO to domestic companies like Samsung Biologics, concrete plans for direct investment are highly likely to materialize."

In the biopharmaceutical industry, it is positively evaluated that if domestic company Samsung Biologics undertakes contract manufacturing of mRNA vaccines, it will not only positively impact domestic vaccine supply but also lay the groundwork for long-term mRNA vaccine development. Samsung Biologics is the world’s top CMO company with an annual biopharmaceutical production capacity of 364,000 liters. With the ongoing construction of its 4th plant, which will add 256,000 liters, the total capacity will reach 620,000 liters, accounting for about one-third of the global contract manufacturing scale. The 4th plant broke ground in October last year and is scheduled for partial operation by the end of next year.

Moderna selected GC Green Cross as its domestic distributor and regulatory affairs agent in March. If a contract manufacturing agreement is signed with Samsung Biologics this time, multifaceted cooperation with domestic vaccine companies is expected. SK Bioscience is already contract manufacturing AstraZeneca and Novavax vaccines domestically, and by producing mRNA vaccines such as Moderna’s, Korea can leap forward as a global vaccine hub. SK Bioscience has signed a CMO contract with AstraZeneca for both bulk and finished products and a contract development and manufacturing organization (CDMO) agreement with Novavax. SK Bioscience pursues a two-track strategy by developing two COVID-19 vaccine candidates independently, separate from contract manufacturing volumes.

Additionally, Hanmi Pharmaceutical and ST Pharm are also mentioned as potential mRNA vaccine contract manufacturing companies. Celltrion, which succeeded in developing Korea’s first domestic COVID-19 treatment, has not yet directly entered the vaccine business, but Honorary Chairman Seo Jung-jin stated at a briefing in February, "We are already prepared to enter the vaccine field." A bio industry insider said, "If domestic companies undertake large-scale contract manufacturing of COVID-19 vaccines, it will help future vaccine supply," adding, "At a time when national demand for mRNA vaccine R&D is increasing, long-term benefits such as technology transfer can be expected."