SK pharmteco to strengthen small molecule and peptide capacity with $260 million investment

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SK Group’s contract development and manufacturing organization (CDMO) arm SK pharmteco is spending $260 million to expand its small molecule and peptide manufacturing muscle in South Korea.

The expansion involves setting up a new facility, which is planned to begin operations in late 2026. The facility, which will include 300 new hires, will have a footprint of 135,800 square feet with eight production trains with an output of tens of metric tons annually.

After a difficult period with shocks from the Covid-19 pandemic and the war in Ukraine, the complex global supply chain for small molecule medicines is facing challenges of limited capacity and growing regulatory complexity. Outsourcing production to CDMOs is one of the ways drugmakers can make their supply chain more reliable, and SK pharmteco’s expansion is planned to help clients achieve this goal.

Established in 2019, SK pharmteco helps clients to manufacture small molecules in addition to biologics such as cell and gene therapies with facilities in the U.S., Ireland and South Korea. The company offers services including process development, engineering, and scalable drug production. SK pharmteco can also produce complex chemicals using semi-continuous and continuous processing methods.

The latest investment will help SK pharmteco to offer peptide R&D and production facilities at current good manufacturing practice (cGMP) standards. Additionally, SK pharmteco plans to build the shell for a sixth manufacturing plant to prepare for increased capacity going forward.

The investment is increasing SK pharmteco’s capacity in Asia in line with its global expansion strategy, said CEO Joerg Ahlgrimm in a public statement."By expanding our capacity and capabilities, we can offer even faster turnaround times, increased flexibility, and a higher level of quality,” added Yongwoo Park, SK pharmteco’s president, small molecule, Asia.

The global market for small molecule CDMOs was valued at $67.93 billion in 2023 and is expected to grow by 7.1% per year to $108.46 billion by 2030. The market growth is being fuelled by the rising prevalence of cancer and the need for outsourcing amid increasing pricing and regulatory pressures.

Expansion is ongoing across several manufacturers in the small molecule space. Switzerland’s Lonza completed an expansion of its U.S. Solid Form Services Facility for small molecule drug development last year. And Pfizer spent an impressive $743 million this year to expand a plant in Singapore for producing oncology, pain, and antibiotic medicines.