[BioUSA] Bio Challenger Lotba "After Syracuse, Next is Korea"

Lee Won-jik, CEO of Lotte Biologics
"Large-scale production plant installation in Korea is advantageous for labor and maintenance costs"
Fierce competition expected between Songdo, Incheon and Osong, Chungbuk

Lee Won-jik, CEO of Lotte Biologics, and Lee Hoon-gi, Chairman of the Board of Directors of Lotte Biologics, are speaking at a press conference held on the 14th (local time) in San Diego, California, USA. (Photo by Lotte Biologics)

[San Diego (USA) = Reporter Lee Chun-hee] Lotte Biologics, which has taken on the heavy burden as Lotte Group's new growth engine, made a spectacular debut on the global stage. After laying the foundation for growth by acquiring Bristol-Myers Squibb (BMS)'s production plant in Syracuse, New York, USA, it is expected to proceed with establishing a production base in Korea and securing investment capacity through portfolio adjustments within Lotte Group.

On the 14th (local time), at a press conference held in San Diego, California, Lotte Biologics CEO Lee Won-jik answered the question, "Where are you considering as the next production base following the Syracuse plant?" by saying, "Korea is the most attractive."

Currently, the production capacity of Lotte Biologics' Syracuse plant is 35,000 liters, similar to the 30,000 liters of Samsung Biologics' first plant. To grow within the increasingly competitive global Contract Manufacturing Organization (CMO) industry, expanding large-scale production plants is essential.

CEO Lee emphasized, "Although there is considerable idle land in Syracuse, the costs for plant expansion, labor, and maintenance are higher than in Korea," adding, "Considering this, Korea is advantageous for establishing a mega plant (large-scale production plant)."

It is expected that a fierce competition for attraction will unfold among existing domestic bio clusters such as Songdo in Incheon and Osong in Chungbuk. Regarding this, CEO Lee added, "I have not met anyone yet," emphasizing that it is still at the review stage.

Exterior view of Lotte Biologics factory in Syracuse, New York, USA (Photo by Lotte Biologics)

Regarding Samsung Biologics, which entered the CMO business earlier, he mentioned that they will cooperate together. CEO Lee said, "The CMO market is a blue ocean," and added, "As the proportion of biopharmaceuticals in the overall industry continues to increase, we see it as a relationship to cooperate and grow the industry together." He also explained, "CMO is not a structure where companies switch because of low prices; once approved, production continues," and due to the nature of the industry, intense competition among Korean companies over orders is difficult to occur.

Regarding future growth strategies, he revealed that although they will focus on single antibody drug production in the short term, they are also conducting extensive reviews on next-generation modalities such as messenger RNA (mRNA), cell therapy, chimeric antigen receptor (CAR)-T, and antibody-drug conjugates (ADC) in the long term.

Lee Won-jik, CEO of Lotte Biologics (left in the photo), is talking with visitors at the Lotte Biologics booth at the Bio International Convention 2022 (BioUSA) held in San Diego, California, USA. Photo by Lotte Biologics

In response to some criticisms that the announced investment scale of 2.5 trillion KRW over 10 years by Lotte Group is too small to drive such growth, he emphasized that nurturing the bio-healthcare industry is Chairman Shin Dong-bin's will and that the figure is just a number. Lee Hoon-ki, chairman of Lotte Biologics' board, said, "You don't need to worry about the specific numbers," adding, "We can make large investments and make decisions flexibly."

He also hinted at the possibility of securing investment capacity through bold portfolio adjustments within Lotte Group. Chairman Lee stated, "If existing industries lack competitiveness or are not promising for the future, even if they are currently profitable, they could be sold to foster bio-healthcare."

San Diego (USA) = Reporter Lee Chun-hee spring@asiae.co.kr