'35 Years of Bio Dedication' SK Opens the K-Bio Era

SK Starts Global New Drug Manufacturing
Bio Business Begins with National Service and Patriotism
Domestic and World’s First New Drug 'Sunpla' Secures 'New Drug Sovereignty'
Secures 'Vaccine Sovereignty' with Domestic Production of COVID-19 Vaccine

SK Group Chairman Chey Tae-won is holding a meeting with SK Biopharm CEO Cho Jung-woo and other officials during a visit to SK Lifescience, the U.S. subsidiary of SK Biopharm, in 2017. Photo by SK

[Asia Economy Reporter Jeong Dong-hoon] SK Group, which succeeded in developing Korea's first new drug, has opened a new chapter for 'K-Bio' by successfully domesticating the COVID-19 vaccine.

Having ventured into the bio business for 35 years, SK's growth into a leading domestic bio company was driven by the determination of former Chairman Choi Jong-hyun and Chairman Choi Tae-won, who aimed to "secure bio sovereignty and serve the nation through business."

Former Chairman Choi Jong-hyun's Spirit of Serving the Nation through Business... Sowed the Seeds of 'SK Bio' for 35 Years

In the 1980s, while contemplating new growth engines, SK turned its attention to bio. The method of synthesizing compounds in textile manufacturing was similar to pharmaceutical production methods, and considering that overseas textile companies were shifting their business models to life sciences, SK entered the bio business. Former Chairman Choi Jong-hyun’s background in chemistry, studied at Seoul National University and in the United States, also played a role.

Although bio was the goal, actual commercialization was not easy. At that time, the pharmaceutical industry mainly imported new drugs from multinational companies for simple processing, packaging, or replication sales. When a large company like SK entered the pharmaceutical field, competitors strongly opposed it, calling it an infringement on small and medium industries.

Former Chairman Choi Jong-hyun said, "If large companies participate, they must return profits to society and serve the people," and urged, "SK's goal is to create world-class new drugs bearing our brand, so do not worry," focusing solely on new drug development.

In 1987, he established the Life Sciences Research Laboratory under Seonkyung Industry and began research divided into four fields: synthetic new drugs, natural product new drugs, formulations, and bio. The laboratory expanded into a research institute in 1989, taking gastric cancer treatment new drug as the first project, and after 10 years of research, developed 'Sunpla,' a third-generation platinum-based anticancer drug, in 1999.

Sunpla was Korea's first and the world's first new drug, making South Korea a nation with new drug sovereignty about 100 years after the start of modern Korean medicine. The new drug was synthesized from compounds to create a previously nonexistent medicine, and SK invested a huge amount of 8.1 billion KRW at the time over 10 years of research.

The former chairman also established research institutes in New Jersey, USA, and Daedeok, and in 1993 launched the 'P Project' to catch up with global new drug companies. Named after the first syllable of Pharmaceutical, this project became the starting point of SK Biopharm. The Life Sciences Research Institute established under Seonkyung Industry became the foundation for SK Chemicals, SK Bioscience, and SK Plasma, specialized in bio, vaccines, and formulations.

SK Family, Including Chairman Choi Tae-won and Vice Chairman Choi Chang-won, Carrying the Baton in New Drug Development

The bio business DNA left by the former chairman was inherited by SK Chairman Choi Tae-won and his cousin, SK Discovery Vice Chairman Choi Chang-won, who further evolved the bio business.

After Sunpla, SK developed Korea's first natural product new drug 'Joins' (arthritis treatment) in 2001 and the new drug 'MBX' (erectile dysfunction treatment) in 2007, becoming a company holding two of the 35 synthetic new drugs in Korea.

SK's vaccine technology, which gained attention through domestic COVID-19 vaccine development, came on track with Vice Chairman Choi Chang-won's involvement. After becoming CEO of SK Chemicals in 2006, he promoted the SKYVAX project for premium vaccine development. By establishing a vaccine factory in Andong, Gyeongbuk, he led vaccine research and in 2016 developed the world's first cell-cultured flu vaccine (Skycellflu) that prevents four types of viruses. Cell culture technology attracted attention in the bio industry because it has a shorter production period and higher efficiency compared to egg-based vaccines, enabling rapid response to flu pandemics.

Building on these achievements, Vice Chairman Choi established SK Bioscience in 2018 and advanced K-vaccine know-how. The Bill & Melinda Gates Foundation's $3.6 million research funding for COVID-19 vaccine development was also a decision considering SK Bioscience's technological capabilities.

While Vice Chairman Choi focused on vaccines, Chairman Choi Tae-won concentrated on new drug development.

Chairman Choi established SK Biopharm and developed two new drugs, 'Sunosi' for sleep disorders and 'Xcopri' for epilepsy, obtaining approval from the U.S. Food and Drug Administration (FDA) in 2019. SK is the only domestic company that independently discovered new drug candidates, conducted clinical trials, obtained FDA approval, and handled marketing.

SK Bio Business Establishes Itself as a National Growth Engine Alongside Semiconductors and Batteries

In 2002, Chairman Choi set a long-term goal to "nurture the bio business to become the group's core growth engine after 2030," and SK made aggressive investments in bio, establishing SK Biopharm, SK Bioscience, SK Plasma, and SK Pharmteco. These companies focus respectively on new drugs, vaccines, formulations, and pharmaceutical contract manufacturing, driving SK's growth into the most solid bio portfolio company.

Especially, the combined sales of these four companies increased from 953.2 billion KRW in 2019 to 2.4022 trillion KRW in 2021, becoming a strong growth pillar for SK alongside semiconductors and batteries. SK Pharmteco, specializing in pharmaceutical contract manufacturing, saw sales rise from 555.4 billion KRW to 948.6 billion KRW, playing a key role in SK's bio business.

Chairman Choi is also expanding SK's bio market globally, strengthening the status of 'K-Bio.'

In 2017, he acquired BMS's Ireland production facility (CMO) and in 2018, the U.S. contract development and manufacturing organization (CDMO) AMPAC. Including the factory in Sejong, Korea, SK has become the only company with bio production bases in Korea, the U.S., and Europe. Chairman Choi also established SK Pharmteco in California to integrate overseas production facilities and handle global marketing of new drugs, targeting the U.S. market.

Last year, Chairman Choi acquired French cell and gene therapy company Eposkesi, and in January invested in U.S. cell and gene therapy company CBM, expanding into cell and gene therapy production. Notably, the investment in Eposkesi led to the French government awarding Chairman Choi the 'Legion of Honour' medal in recognition of his contribution to economic cooperation between the two countries during his visit to France supporting the 2030 Busan Expo bid, strengthening economic diplomacy.

Additionally, SK is investing in Roivant Sciences, which developed new drugs by degrading proteins using artificial intelligence, and established Ignis, a central nervous system pharmaceutical company in China, actively entering overseas markets. SK plans to invest at least 6 trillion KRW in bio-related fields over the next five years, expecting more SK-originated K-Bio stories to emerge.

An SK official said, "SK's bio history is the result of former Chairman Choi Jong-hyun, Chairman Choi Tae-won, and bio researchers repeatedly taking on new challenges without fear of risk," adding, "We will continue bold investments and research to create another legend of 'K-Bio.'"