Kyungbo Pharm, a leader in the active pharmaceutical ingredient (API) sector, announced plans to establish a facility for Antibody-Drug Conjugate (ADC) Contract Development and Manufacturing Organization (CDMO) services. This move signals the company's intention to explore new business opportunities. Industry observers suggest that Chong Kun Dang's recent expansion into the ADC sector may have influenced this strategic direction. However, Kyungbo Pharm has stated that its exact strategy is still under consideration.

On August 14th, Kyungbo Pharm disclosed plans to invest $64 million to build a GMP-compliant ADC CDMO facility in Silok-dong, Asan, South Chungcheong Province, with completion targeted by 2026. ADC technology, which involves linking a drug payload to an antibody to target cancer cells selectively, is a rapidly growing area of interest for pharmaceutical companies due to its potential for enhanced therapeutic efficacy and reduced side effects.

Kyungbo Pharm's move into the ADC market is seen as an effort to overcome profitability challenges with its existing synthetic drug portfolio. The company currently focuses on API production for synthetic drugs but faces profitability issues despite increased revenues. For the first half of this year, Kyungbo Pharm reported $90.5 million in revenue, up from $75.1 million the previous year, yet operating profit remained modest at $3.2 million.

In contrast, the ADC sector offers higher profitability, and Kyungbo Pharm is already producing the cytotoxic payloads and linker technology needed for ADCs in-house. This positions the company to operate effectively as an ADC CDMO. Additionally, by partnering with Chong Kun Dang and other firms, Kyungbo Pharm can build a strong track record in bio-manufacturing, which is essential for securing future contracts.

Chong Kun Dang has also shown a significant interest in the ADC sector, having acquired ADC platform technologies and focusing on developing ADC drugs like 'CKD-703' for non-small cell lung cancer. Experts predict that as Chong Kun Dang expands its drug development portfolio, Kyungbo Pharm will manage the CDMO aspect, thereby enhancing their presence in the ADC field.

However, Chong Kun Dang's strategic direction is still being finalized. A company representative commented, "While Kyungbo Pharm is establishing a new ADC facility, the exact plans for its utilization have not yet been determined."