Lotba "Domestic Factory Construction to Start Within the Year"... $3 Billion Investment, 360,000ℓ Capacity

Factory 1 Targeted for Completion in 2027
'Lotte Bio Campus' to Create Collaborative Spaces

Continuous Expansion Planned for Syracuse Factory
Establishing Production Facilities for the Emerging 'ADC' Technology

Lee Won-jik, CEO of Lotte Biologics [Photo by Lotte Biologics]

[Asia Economy Reporter Chunhee Lee] Lotte Biologics, which laid the foundation for entering the contract development and manufacturing organization (CDMO) business through the acquisition of a factory in Syracuse, USA, has unveiled a growth strategy through large-scale domestic investment. The plan is to invest a total of $3 billion (approximately 3.744 trillion KRW) to start construction of a domestic factory in the second half of this year and complete three mega plants (large factories) to secure an antibody drug production capacity of 360,000 liters.

Wonjik Lee, CEO of Lotte Biologics, stated at the 'JP Morgan Healthcare Conference' held in San Francisco, USA, on the 10th (local time), "We plan to quickly establish ourselves in the CDMO market and further strengthen our business competitiveness through two strategies: acquisition and new construction."

Launching the Construction of the 'Lotte Bio Campus'

After the surprise acquisition of the Syracuse factory in New York State, USA, operated by Bristol-Myers Squibb (BMS) in May last year, Lotte Biologics quickly laid the groundwork throughout the year, including establishing a corporation in June and completing the acquisition of the Syracuse factory in December. Typically, entering the CDMO market by building a new factory requires at least one year or more until commercial production, but by acquiring a production plant with a capacity of 35,000 liters, they succeeded in significantly reducing the entry time.

In addition, they plan to accelerate growth by starting construction of a domestic factory this year. CEO Wonjik Lee presented the goal of starting construction of the first plant with a production capacity of 120,000 liters in the second half of this year, completing it in the second half of 2025, obtaining Good Manufacturing Practice (GMP) certification, and beginning commercial production in 2027. Not stopping there, they plan to invest a total of $3 billion to build two more plants of similar scale, completing a total production capacity of 360,000 liters. Originally, CEO Lee had expressed his determination that "Korea is the most attractive," and the investment scale of the '1 trillion KRW domestic mega plant' has been increased more than threefold to establish the 'Lotte Bio Campus.'

The Lotte Bio Campus will not only include Lotte Biologics factories but also various spaces to create an industrial ecosystem. They plan to build a 'Bio-Venture Initiative' where startups and ventures can utilize facilities within the campus and continue collaboration.

As for the factory site, it is known that they are looking for locations within existing bio clusters that can create synergy effects, such as Songdo in Incheon and Osong in Chungbuk. In the case of the Songdo cluster, where attracting foreign capital with more than 10% equity is essential, it is reported that they are considering entry through a strategy that recognizes about 20% of the shares invested by the Japanese Lotte Group in Lotte Biologics as foreign capital.

Active Global Expansion... Establishing ADC Production Facilities, a 'Hot Item'

They are continuing unstoppable expansion not only domestically but also in the United States. After BMS transferred the Syracuse factory to Lotte Biologics and entrusted existing production volumes, they secured stable sales and are proceeding with the expansion of the Syracuse factory and securing additional bases.

Lotte Biologics has signed a three-year CMO contract worth $220 million (approximately 273.5 billion KRW) with BMS. After three years, BMS has an option to extend the contract for up to two more years, allowing stable sales for up to five years. A Lotte Biologics official explained, "In addition, there is a possibility to receive separate orders from BMS," adding, "Conversely, depending on management and order situations, contracts with BMS can be mutually agreed to be reduced, and other order contracts can be received for production."

Exterior view of Lotte Biologics' Syracuse plant in the United States [Photo by Lotte Biologics]

Furthermore, since the current usage scale of the Syracuse factory, which has a production capacity of 35,000 liters, is only about 30% of the total site, continuous expansion will be pursued. In particular, they plan to establish antibody-drug conjugate (ADC) CMO facilities, which have recently become a hot topic in the bio industry with consecutive big deals. ADCs are drugs that conjugate antibodies and drugs. They connect antibodies that bind to cancer antigens with cytotoxic drugs (payloads) that can kill cancer cells via linkers, effectively delivering toxins only to cancer cells like guided missiles, making them a next-generation cancer treatment technology attracting attention.

In addition to existing drug substance (DS) production facilities, they plan to expand DS facilities and also expand clinical material production culture facilities and drug product (DP) facilities.

They are also pursuing the acquisition of additional bases. The plan is to establish contract development (CDO) facilities in key bio clusters in the U.S. such as Boston and San Francisco, which have good customer accessibility, to secure competitiveness in order acquisition.

CEO Wonjik Lee said, "We will do our best to provide innovative medicines to patients," and added, "We will leap forward as a global company that can contribute to the development of the bio industry."