SK Biotek, the domestic subsidiary of SK Pharmteco, has completed a new plant in Sejong to produce active pharmaceutical ingredients (API) for obesity treatments. As demand for peptide ingredients surges amid the growth of the global obesity-drug market, competition for orders with Samsung Biologics (207940.KS), which recently acquired a peptide CDMO company, is also expected to intensify.
According to industry sources on the 2nd, SK Biotek received approval to use its new Sejong facility, the "M5 plant," at the end of June this year. The facility is a peptide API plant newly built to meet demand for glucagon-like peptide (GLP)-1 class obesity treatments. Spanning 12,634 square meters, it can produce dozens of tons of small-molecule and peptide drugs annually across eight production trains. SK Pharmteco decided in 2024 to invest $260 million to build the plant. It was completed about a year after construction began last year. SK Inc. established SK Pharmteco in Sacramento, in the United States, in 2019 to operate its global pharmaceutical contract development and manufacturing organization (CDMO) business structure. SK Biotek is SK Pharmteco's Korean subsidiary.
Once the new plant begins full operation next year, it is expected to generate about 400 billion won in annual revenue. That is equivalent to 43% of SK Pharmteco's revenue last year (932 billion won). SK Pharmteco secured orders for obesity-drug API in advance of the new plant's completion. After signing a supply contract with Eli Lilly in 2024 worth up to 2 trillion won over five years, it has been producing API for clinical use since this year. Kim Soo-hyun, head of the research center at DS Investment & Securities, explained, "This API is used to develop a long-acting formulation that extends the dosing cycle from once a week to once a month." SK Pharmteco is expected to move into commercial API production following the plant's completion.
SK Pharmteco's push to expand peptide production capacity comes as demand for peptide API is rising rapidly with the growth of the GLP-1 class treatment market. A peptide is a substance made of two or more amino acids, the basic units of protein, linked together. Representative drugs developed by artificially synthesizing these to mimic the action of hormones in the body are GLP-1 class obesity treatments such as Wegovy and Mounjaro. According to market research firm Fortune Business Insights, the global GLP-1 receptor agonist market is projected to grow from $73.4 billion (about 107 trillion won) in 2026 to $254.2 billion (about 372 trillion won) in 2034.
SK Pharmteco plans to expand additional orders based on the production track record accumulated at the new Sejong plant. It plans to build peptide production capacity at the California plant of AMPAC in the United States going forward. SK Pharmteco holds contract manufacturing (CMO) affiliates based in the United States and Europe, including SK Biotek, SK Biotek Ireland, AMPAC, Yposkesi, and CBM.
Samsung Biologics also decided on the 20th of last month to acquire a 100% stake in PolyPeptide, a peptide CDMO company, for 2.7 trillion won. Unlike building production facilities in-house through new plant construction, the strategy is to secure a production base in a short period through mergers and acquisitions (M&A). PolyPeptide currently holds six production sites across five countries, including Europe, the United States, and India, and posted revenue of 389.3 million euros (about 656.4 billion won) last year. If the acquisition process is completed by year-end, the acquired company's performance is expected to be reflected in consolidated financial statements for a full year starting next year.
Along with the entry of the two conglomerates, competition in the CDMO business surrounding the peptide market is also heating up. Major competitors such as Switzerland's Lonza and China's WuXi are supporting peptide CDMO services in addition to existing biopharmaceuticals. Domestic companies such as HLB Pep and Hanmi Fine Chemical are also broadening their business base by expanding peptide production facilities. An industry official stressed, "The scope of peptide drug applications is expanding to cancer, immune and rare diseases, and brain disorders," adding, "Competition among CDMO companies to secure production capacity will become even fiercer going forward."
