DuChemBio(176750) will build Korea's first contract development and manufacturing organization (CDMO) plant for radiopharmaceuticals (RPT). The plan is to grow it into a production base that can supply radiopharmaceuticals made domestically not only to Korea but also to East Asian markets such as Japan, China and Taiwan.

The company on the 4th signed an investment agreement with Jeonbuk State and Jeongeup to establish a CDMO plant specialized in radiopharmaceuticals and a research and development (R&D) center. It will invest a total of 34.3 billion won, and the plant aims to begin operations in the second half of 2029 with an annual production capacity of about 1,000 batches.

Chief Executive Kim Sang-woo met with ChosunBiz at the headquarters in Mapo-gu, Seoul, on the 9th and said, "We are currently in CDMO talks with three global drugmakers," adding, "Interest has been growing since we released the Jeongeup investment."

Kim Sang-woo, CEO of DuChemBio, interviews with ChosunBiz at the company headquarters in Mapo-gu, Seoul, on the 9th. /Courtesy of Park Soo-hyun

◇ RLT market seen reaching 40 trillion won… DuChemBio "to secure production base"

As of last year, a total of 67 radiopharmaceuticals approved by the U.S. Food and Drug Administration (FDA) have been commercialized in the global market. Of these, 54 are for diagnostics and 13 are for therapy. However, radioligand therapies (RLTs) that have recently drawn market attention are limited to just two blockbusters from Novartis, "Lutathera" and "Pluvicto."

According to global market research firm Fortune Business Insights, the global RLT market is expected to grow from $4.23 billion (about 6 trillion won) this year at a compound annual rate of 27.51% to $29.54 billion (about 40 trillion won) in 2034. As of June last year, 67 RLT candidates had reportedly entered clinical stages.

This is the very market DuChemBio aims to enter. Executive Director Kim Seung-woo said, "There are hardly any RLT candidates that have reached the late stages of phase 3 and are drawing market attention," adding, "If such compounds emerge, they could be a major driver for the CDMO business."

With Novartis (Japan, China) and AstraZeneca (China) pushing to build production facilities in East Asia, DuChemBio is first targeting the status of "second vendor." Because radiopharmaceuticals cannot be stockpiled easily due to the half-lives of radioisotope raw materials, there must be an "alternative plant" that can immediately supply volumes if a production site encounters problems, the company said.

Kim said, "Even if profitability is not large right away, we need to build a track record by producing and supplying clinical trial materials for global drugmakers to become the first candidate among partners for large-scale commercial manufacturing contracts in the future."

However, since the market is still in its early formation, there is no guarantee it will grow as projected. Novartis in July halted development of "Lutetium-NeoB," which was in phase 2. Eli Lilly in February also ended development of candidates it had secured through the acquisition of an RLT specialist before they entered phase 2.

Even so, DuChemBio sees strong growth potential for RLTs. They could offer a new treatment modality to target cancers that have developed resistance to existing anticancer drugs. Kim said, "But because the radiation energy is strong, it can also damage normal tissue, so the key is how precisely it is delivered to the intended cancer cells."

Boston Consulting Group states in a paper published in Nature Drug Discovery in June last year that the radioligand therapy (RLT) market is expanding rapidly, with 67 assets in clinical stages in addition to two approved therapies. The graphic shows the current RLT clinical pipeline. a indicates the types of targeting molecules that bind to cancer cells, and b shows the specific targets and cancer types the therapies aim at. (The numbers and colors in the chart indicate the number of drugs in development and the most advanced clinical phase; a single drug can be used across multiple cancers or targets.) /Courtesy of Nature Drug Discovery

◇ Beyond CDMO to in-house therapies… building an RLT value chain in Jeongeup

The Jeongeup investment will proceed in two stages. First, 13.6 billion won will be invested to establish a CDMO plant and an R&D center. After that, 20.7 billion won will be used to build a radioisotope manufacturing center and an active pharmaceutical ingredient manufacturing center.

Kim Sang-woo said, "The actual annual investment will be just over a maximum of 6 billion won," adding, "We expect to be able to sufficiently raise funds with 19.3 billion won in equity and 15 billion won in facility loans." The company does not plan a paid-in capital increase.

The break-even point is seen in 2031. He said, "Since fixed costs account for more than 80% of cost of goods sold, once we pass break-even, a substantial portion of additional sales will convert to profit," adding, "Our goal is to exceed 20 billion won in plant revenue in 2033."

There is strategic groundwork behind building a radioisotope manufacturing center. If the company can produce radioisotopes in-house, it can raise margins by supplying isotopes together to CDMO clients. This will serve as a barrier to entry for latecomers.

The same infrastructure can be used for in-house therapy development. DuChemBio is currently reviewing three targets, including TROP2 and FAP. TROP2 is overexpressed in many solid tumors such as triple-negative breast cancer, and FAP has been confirmed to be expressed in the stroma in more than 90% of epithelial cell–derived cancers such as pancreatic, biliary tract and colorectal cancers.

Kim said, "We plan to finalize and disclose at least two candidates by the first half of next year," adding, "We are considering out-licensing to global drugmakers after completing preclinical and phase 1."

DuChemBio's 12 radiopharmaceutical manufacturing sites in Korea. Five sites marked in blue meet the U.S. Food and Drug Administration (FDA) current Good Manufacturing Practice (cGMP) standards and are certified. The numbers in parentheses indicate the number of cyclotrons at each site. /Courtesy of DuChemBio

◇ "Diagnostics are a solid foundation… the bigger therapies get, the more diagnostic demand rises"

DuChemBio is Korea's No. 1 radiopharmaceutical corporations for diagnostics. As of 2024, the domestic market share of the cancer diagnostic "FDG" is 53.2%. The Parkinson's disease diagnostic "FP-CIT" is 52%, and the Alzheimer's disease diagnostics "Vizamyl" and "Neuraceq" are 94.8%.

Last year, consolidation revenue was 38.5 billion won, and operating profit was 7.4 billion won. They rose 8% and 47%, respectively, from the previous year. This year, the company is targeting more than 40 billion won in revenue and 10 billion won in operating profit.

The diagnostics business is expected to continue serving as the company's cash generator until the therapeutic radiopharmaceutical CDMO business gains traction. In addition to the 12 manufacturing sites nationwide that currently produce diagnostic radiopharmaceuticals, the Jeongeup plant will also make them.

Kim expects demand for diagnostic radiopharmaceuticals to increase, buoyed by growth in therapies for prostate cancer and degenerative brain diseases in Korea. The prostate cancer diagnostic "Prostaseek," which began production late last year, has also been covered by national health insurance since the 1st.

Particularly high expectations are pinned on the Alzheimer's market. The therapy "Leqembi," currently sold domestically, requires a PET/CT (positron emission tomography/computed tomography) scan before administration to check for amyloid protein accumulation in patients. Kim said, "For 'Kisunla,' which is awaiting domestic approval, the frequency of PET/CT scans is expected to be more than double that of Leqembi due to prescribing procedures."

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