Lotte Biologics’ CMO business makes smooth progress

Procures KRW 800 billion, total sales KRW 234.4 billion last year

Lotte Biologics, 210 billion won in paid-in capital increase to shareholders….invests in the construction of Songdo plant

Fourth parent company financing since its launch... a total capital increase of KRW 783.2 billion

Posts sales of KRW 234.4 billion last year... Cumulative sales of KRW 462 billion since its establishment

Lotte Biologics has been making smooth progress, building a new plant since its launch.

 

Three years after its launch, it has received a total of KRW 800 billion from its parent company and is speeding up the construction of its Songdo plant.

 

The US plant, which was acquired 3 years ago, also generated more than KRW 200 billion in sales every year.

 

On the 27th, according to the Financial Supervisory Service, Lotte Biologics decided on the 26th to issue KRW 210 billion in paid-in capital to its shareholders.

 

The new shares will be issued to Lotte Biologics shareholders in the form of 3,231,000 shares.

 

The new shares to be issued will account for 35.8% of the total number of shares issued before the capital increase, which is 9,017,500 shares.

 

The issue price of new shares is KRW 65,000 per share.

 

Lotte Biologics, which was launched in June 2022, is owned by Lotte Corporation and Lotte Holdings, which have 80% and 20% stakes, respectively.

 

Lotte Corporation and Lotte Holdings are estimated to have invested KRW168 billion and KRW 42 billion, respectively, in this paid-in capital increase.

 

Lotte Corporation said, “We will invest KRW 168 billion to maintain control over Lotte Biologics and enhance its business competitiveness.”

Lotte Biologics

Lotte Corporation entered the biopharmaceutical industry in May 2022 by acquiring the BMS plant in eastern New York for USD 160 million (about KRW 200 billion).

 

The BMS plant is a production facility dedicated to biopharmaceuticals, with an annual production capacity of 35,000 liters.

 

Lotte also signed a USD 220 million Contract Manufacturing Organization (CMO) contract with BMS for biopharmaceutical production.

 

In June 2022, Lotte Holdings officially entered the biopharmaceutical business by launching Lotte Biologics.

 

Lotte Biologics will use the funds it has raised this time to build a factory in the Songdo Bio Campus.

 

Lotte Biologics signed a memorandum of understanding (MOU) with the Incheon Metropolitan City and the Incheon Free Economic Zone in June 2023 to build a mega plant in Songdo, Incheon.

 

Lotte Biologics plans to build 3 mega plants with a total capacity of 360,000 liters by 2030.

 

Lotte Biologics began construction of Plant 1 in the Bio Campus in Songdo, Incheon, in March last year, and aims to obtain GMP approval by the second half of 2026 and start operations in 2027.

 

This is the fourth paid-in capital increase made since Lotte Biologics' launch.

 

Lotte Biologics conducted a paid-in capital increase through allocation to shareholders of KRW 210.6 billion in December 2022.

 

In March 2023, it raised KRW 212.5 billion through a paid-in capital increase.

 

Lotte Biologics also decided to conduct a paid-in capital increase of KRW 150.1 billion in June last year.

 

When this capital increase is completed, Lotte Biologics will have raised a total of KRW 783.2 billion from its parent company through 4 paid-in capital increases since its launch.

 

Lotte Biologics was launched with a capital of KRW 13 billion and has received a total of KRW 796.2 billion in investment from its parent company.

 

The company has been generating steady profits from the BMS plant it acquired at the time of its launch.

 

Lotte Biologics inherited the existing CDMO contract when it acquired the BMS plant.

 

The drugs that BMS was producing will continue to be produced for the next three years after Lotte acquired the plant.

 

It is reported that the BMS's immuno-oncology drugs 'Opdivo' and 'Yervoy', the kidney transplant immunosuppressant ‘Nulojix,’ and the multiple myeloma treatment ‘Empliciti’ were produced at the Syracuse plant.

 

Lotte Biologics has set a goal of achieving sales of KRW 1.5 trillion by 2030.

 

Lotte Biologics recorded sales of KRW 234.4 billion and an operating loss of KRW 66.3 billion last year.

 

Lotte Biologics generated its first sales of KRW 228.6 billion in 2023.

 

The cumulative sales of Lotte Biologics since its launch have been tallied at KRW 463 billion.

 

Lotte Biologics announced its CDMO business vision at the JP Morgan Healthcare Conference in January.

 

CEO James Park presented the successful CDMO transformation of the Syracuse Bio Campus in New York and the blueprint for the Songdo Bio Campus.

 

He expressed an ambition to accelerate Lotte Biologics’ leap into the global CDMO market, unveiling its innovative proprietary ADC platform SoluFlex Link, and announcing plans to provide an ADC one-stop service in collaboration with finished drug product partners in North America.

 

SoluFlex Link is an ADC platform that uses a unique linker technology jointly developed by Lotte Biologics and Kanaph Therapeutics, a drug fusion technology bioventure.

 

The company believes SoluFlex Link improves instability, which is a major drawback of antibody-drug conjugates (ADCs) and can be used with various antibodies and payloads.

 

“New ADC drug developers can conduct various research and development with this technology,” said Lotte Biologics.

 

“We believe that can offer an optimized solution for the development and production of next-generation ADCs because it can increase production yield and treatment efficiency.”