The domestic contract development and manufacturing (CDMO) supply chain for the "once-monthly glucagon-like peptide-1 (GLP-1)" obesity drug under development by Eli Lilly and Company has effectively entered the final stage. This is because the domestic production system has been fully established with the completion of SK pharmteco, an SK(034730) Group subsidiary,'s large-scale peptide active pharmaceutical ingredient (API) plant.
Industry attention is now focused on the company that will handle the final stage of the supply chain: finished drug production. For now, Peptron(087010) is being cited as the most likely candidate. Observers are giving more weight to this view as Peptron is reportedly pursuing an expansion of its production facilities to 2.6 times the originally planned size.
◇ SK pharmteco's "large-scale API plant" approved… eyes on Peptron for "finished drug" role
According to the pharmaceutical and biotech industry on the 3rd, SK biotek, a subsidiary of SK pharmteco, obtained use approval last month as scheduled for Plant 5, a large-scale peptide API production facility built in the Sejong Myeonghak Industrial Complex. The company plans to fully operate the plant as early as the end of the year and expand annual production of Lilly's once-monthly clinical API, which is currently being produced, to several tens of tons.
Plant 5 (M5) is a basement-to-5th-floor facility with about 340 billion won invested and a total floor area of about 26,400 square meters. The building houses both Plant 5 and Plant 6 (M6) as a single structure, and large equipment is reportedly being installed in Plant 6. Once both Plants 5 and 6 are operational, SK pharmteco's domestic peptide production capacity is expected to expand further.
With this use approval, the "once-monthly obesity drug" production belt Eli Lilly and Company is building in Korea has effectively entered its final stage. Lilly is establishing a CDMO system centered on the Chungbuk region that consolidates "pharmaceutical intermediates–APIs–finished goods" into a single supply chain.
The production belt has already been running since February this year. Earlier, ChosunBiz reported in Mar. that Lilly had begun producing once-monthly clinical APIs at the SK biotek plant. With the M5 plant now approved for use, the API production system that started up then is expected to scale into a large-volume production base.
Specifically, when IT-CHEM(309710) in Ochang, Cheongju, Chungbuk supplies pharmaceutical intermediates, SK biotek in Sejong receives them to produce APIs. IT-CHEM signed a contract to supply intermediates to SK biotek from Feb. this year through May next year.
IT-CHEM is supplying intermediates under Lilly's oversight through a contract with SK biotek. According to industry sources, Lilly headquarters personnel reportedly stayed on site for several weeks during the construction of Plants 5 and 6 of SK pharmteco to conduct production facility audits.
This increases the likelihood that the clinical API produced by SK biotek will proceed to finished drug production in Korea. In Mar., Lilly signed a memorandum of understanding (MOU) with the Ministry of Health and Welfare to expand clinical research in Korea and is also adding domestic clinical experts.
What remains now is finished drug production, the final stage of the supply chain. The companies currently conducting joint research with Lilly on the once-monthly GLP-1 obesity drug are domestic Peptron(087010) and Sweden's Camurus.
Industry watchers view Peptron as a strong candidate given that Lilly's domestic CDMO production belt is concentrated in the Chungbuk area. With Ochang (IT-CHEM), Sejong (SK biotek), and Osong (Peptron) located nearby, peptide drugs that require cold-chain logistics can be efficiently linked from API to finished goods.
◇ "Peptron Plant 2" to grow 2.5 times… more production materials, broader research scope
Peptron is also accelerating capacity expansion. The Osong Plant 2, slated to break ground in Sept., was initially planned at about 12,000 square meters but will be expanded to around 30,000 square meters. Additional production equipment and performance upgrades (spec-up) will be carried out together, and the investment, initially estimated at about 89 billion won, is expected to increase.
The joint research also includes development of autoinjector technology in addition to long-acting formulations. Applying Peptron's long-acting drug delivery platform "SmartDepot" and an autoinjector would allow patients to self-administer the drug easily by pressing a button once a month.
Plant 2 will be built as a current good manufacturing practice (cGMP) facility for producing the once-monthly obesity drug being co-developed with Lilly. It was initially pursued as a European Union (EU) export GMP plant, but after being changed in Mar. to a cGMP facility eligible for U.S. exports, the plant expansion and equipment performance upgrades were pursued together. The company aims to raise the maximum annual capacity of the existing Osong Plant 1—1 million vials—to about 10 times that level.
Attention is also turning to funding the plant expansion. Multiple institutions, including foreign investment firms, have reportedly expressed interest, but the company is reviewing various options, including using the Public Growth Fund and attracting external investment. However, it says it will not pursue a rights offering.
Industry observers believe the Plant 2 expansion is not just about capacity, but also an investment with an eye to producing Lilly's next-generation long-acting obesity drugs.
Peptron has already completed a finished goods production test of a once-monthly formulation using the "Mounjaro (tirzepatide)" API from Lilly in earlier joint research. As the joint research, initially scheduled to end late last year, has been extended to Oct. 7, candidates for applying the SmartDepot technology have reportedly expanded.
The current research targets are said to include some among the GLP-1–gastric inhibitory polypeptide (GIP)–glucagon (GCG) triple agonist "retatrutide," the GLP-1–GIP dual agonist "brentipatide," and the selective amylin receptor agonist "eloralinatide."
The joint research has also expanded beyond obesity and diabetes treatments to central nervous system (CNS) disorders such as Alzheimer's disease and alcohol use disorder (AUD).