SK(034730) group is fostering pharmaceuticals and biotech as a core growth pillar for the future, but the growth pace of the four companies leading the group's biotech business is diverging. While SK-affiliated SK Biopharmaceuticals(326030) and SK pharmteco are laying a foundation for growth in new drugs and contract development and manufacturing organization (CDMO) businesses, SK discovery(006120)-affiliated SK bioscience(302440) and SK Plasma face the tasks of improving earnings and securing new growth engines.
Recently, attention has also focused on the role change of Chey Tae-won's eldest daughter, Chey Yoon-chung, head of strategy at SK Biopharmaceuticals. Chey has expanded her scope by taking on SK's growth strategy work in addition to the biotech business.
In the industry, rather than interpreting this simply as expansion of management at a specific biotech affiliate or a succession issue, attention is on how SK Group will grow its dispersed biotech businesses. As performance gaps widen by affiliate, some say that in the long term business portfolio adjustments may be inevitable.
◇ Four biotech companies split between SK and SK discovery… diverging report cards
The history of SK Group's pharmaceutical and biotech business goes back to the late chairman Chey Jong-hyon. In 1987, SK established a life sciences lab at its central research institute and began investing in new drug development as a new growth engine following textiles and petrochemicals.
In 1993, the company formed a new drug R&D team at the SK Energy Daejeon Research Center, putting the business into full swing. SK Chemicals, the group's first pharma-biotech affiliate, took on the role of the eldest by acquiring Dongsin Pharmaceutical and Samshin Pharmaceutical.
Currently, the group's biotech businesses are specialized as SK Biopharmaceuticals (new drugs), SK bioscience (vaccines), SK Chemicals (synthetic pharmaceuticals), SK pharmteco (CDMO), and SK Plasma (blood products).
These affiliates are broadly divided into two holding-company pillars: SK and SK discovery.
SK Biopharmaceuticals and SK pharmteco are SK affiliates under the group holding company. SK is the largest shareholder of SK Biopharmaceuticals with 64.04% equity, and SK pharmteco is a 100% subsidiary of SK. The largest shareholder of SK is Chairman Chey Tae-won, who holds 17.9% equity.
By contrast, SK bioscience and SK Plasma belong to the SK discovery group. SK bioscience was established in 2018 through a physical spin-off of SK Chemicals' vaccine business unit, and SK discovery holds 40.9% equity. SK discovery also holds 77.24% equity in SK Plasma. The largest shareholder is SK discovery Vice Chairman Chey Chang-won, a cousin of Chairman Chey Tae-won, who holds 40.72% equity.
The problem is that the business performance of the two pillars has recently diverged clearly. While Chairman Chey Tae-won is pushing aggressive expansion focused on SK Biopharmaceuticals and SK pharmteco, biotech corporations under SK discovery led by Vice Chairman Chey Chang-won urgently need to find growth breakthroughs.
SK Biopharmaceuticals is strengthening its growth strategy around central nervous system (CNS) new drugs. As U.S. sales of the epilepsy drug "Cenobamate" expand, the company recently brought in the epilepsy drug candidate "Opacalim" through an investment of up to 1.1 trillion won from a U.S. biotech company, broadening its pipeline.
SK pharmteco was once mentioned as a potential sale for financial structure improvement, but recently decided to put the sale on hold and continue operating the business. With SK Group's financial restructuring largely wrapped up and differences over price persisting, the revaluation of the peptide business due to growth in the global obesity drug market also played a role.
In particular, as it is producing the active ingredient for Eli Lilly and Company's glucagon-like peptide-1 (GLP-1) obesity drugs, the potential for expanding the peptide CDMO business is growing. The market expects that, for the time being, emphasis will be placed more on nurturing it as an in-group subsidiary than on a sale.
By contrast, biotech corporations under SK discovery face the tasks of improving earnings and securing new growth engines.
SK bioscience enjoyed a COVID-19 windfall with its "Skycovione" vaccine and vaccine contract manufacturing, but it turned to a loss in 2023 and has posted operating losses in the 100 billion won range for two straight years. The key to improving performance is IDT Biologika, a German CDMO corporation acquired at the end of 2024. However, with integration expenses and fixed costs continuing, the effect on results has been limited so far.
Raising utilization at IDT's production facilities is also a task. Last year's output was 70 batches, up 34% from the previous year, but utilization was only 47.6% versus total capacity of 147 batches. While large-scale capacity has been secured, observers say it will take more time to translate this into revenue.
SK Plasma, a blood products specialist corporation, also needs a new growth strategy. Spun off from SK Chemicals' plasma fractionation division in 2015, it makes "essential medicines" such as albumin, immunoglobulin, and blood coagulation factors. Last year, an initial public offering (IPO) was discussed, but concerns over duplicate listings and other issues slowed the listing push. Because blood products use human blood as raw material, profitability is low, and the field does not attract much interest in biotech, and
◇ "Third-generation owner" Chey Yoon-chung expands role from biotech to SK holding company growth strategy
Amid this, attention is also on the role change of Chey Yoon-chung, the eldest daughter of Chairman Chey Tae-won and head of strategy at SK Biopharmaceuticals.
Chey is a biotech expert who majored in biology at the University of Chicago and pursued a master's in bioinformatics at Stanford University. At SK Biopharmaceuticals, Chey has overseen corporate strategy and business execution, directly handling mergers and acquisitions (M&A), licensing, and open innovation.
Since 2024, Chey has been in charge of the group's "growth support" work and is involved in identifying future new businesses. Chey also holds a concurrent executive role in charge of SK growth support, expanding the role to the group level. According to the industry, recently Chey has placed more emphasis on holding-company-level growth strategy and new business identification than on SK Biopharmaceuticals' standalone businesses. Some analysts say that while Chey began building management experience at SK Biopharmaceuticals as a biotech specialist, in the long term Chey will take on a role leading SK's future businesses overall.
This also means it is difficult to directly link the expansion of Chey's role to immediate integration or reorganization of SK Group's biotech businesses.
A business community source said, "It's true that Chey Yoon-chung has biotech expertise, but the recent role is not confined to biotech," adding, "Because the role is broadening to oversee SK's growth strategy overall, it is hard to conclude that Chey will take charge of the biotech business going forward."
However, in the long term, the possibility of adjustments to SK Group's biotech businesses will likely continue to be raised. Although each affiliate focuses on different businesses, some overlap is emerging in certain areas.
A representative area is CDMO. SK pharmteco is expanding around synthetic pharmaceuticals and peptide active pharmaceutical ingredients, while SK bioscience has entered the vaccine and biopharmaceutical CDMO market in earnest through the acquisition of IDT Biologika. The cell and gene therapy (CGT) field also has partial overlap between the two sides' business areas.
In fact, when SK bioscience pursued the acquisition of IDT Biologika, the market questioned whether it would result in overlapping investment with SK pharmteco, which was already running a CDMO business. The need for inter-affiliate business adjustments was also cited as one of the backgrounds behind subsequent rumors of a sale of SK pharmteco.
For now, it is too early to discuss bundling affiliates into one or having a specific company take over another affiliate's business. Because SK and SK discovery each have independent business portfolios and management strategies, it is difficult to predict future restructuring based solely on a simple affiliate transfer.
However, if performance gaps among affiliates continue to widen, the story could change. While SK Biopharmaceuticals is expanding its new drug business and SK pharmteco is securing growth potential in peptide CDMO, if SK bioscience and SK Plasma continue to struggle with weak results and investment burdens, the need for adjustments through selection and concentration could grow rather than maintaining each business as-is.
An industry source said, "It is clear that SK Group aims to cultivate biotech as a future growth business, but in a structure where business actors are divided as they are now, it is not easy for every company to deliver standalone performance," adding, "Rather than who takes over whose business, the key will ultimately be which businesses the group invests in and in which areas it creates synergies."
In the end, the direction of SK Group's biotech businesses is more likely to be determined by the performance of each affiliate than by changes in the roles of specific individuals. Investing more in businesses with verified growth potential and adjusting areas with poor performance or overlapping operations through selection and concentration may be unavoidable going forward.