SK bioscience acquires IDT Biologika for new growth opportunity

[Courtesy of SK bioscience]

SK bioscience has acquired a 60 percent stake in Germany’s IDT Biologika for 339 billion won ($245 million). This deal is a strategic move aligned with the company’s asset rebalancing efforts, according to SK bioscience CEO Ahn Jae-yong.

SK bioscience CEO Ahn Jae-yong held a press conference in Seoul on Thursday to discuss the acquisition and the company’s future plans. He emphasized the significance of the deal, saying, “The core of rebalancing is selection and concentration, and acquiring IDT Biologika is an opportunity we cannot miss at this time. We aim to extend our business scope beyond vaccines to the cell and gene therapy (CGT) contract development and manufacturing sector.”

The acquisition marks SK bioscience’s first major external acquisition since its initial public offering in 2021. Ahn highlighted the attractive pricing of the deal, saying, “Regardless of how good a company is, overpaying for an M&A is unwise. After accumulating funds through our IPO, we have been looking for the right investment and found IDT to be an appealing opportunity at the right time.”

IDT Biologika, a wholly owned subsidiary of Klocke Group, is renowned for its production capabilities in various vaccines and CGTs, with over 100 years of operational history and advanced manufacturing facilities that rank among the global top ten. Its customer base includes more than ten major pharmaceutical companies. Industry estimates place IDT’s corporate value at around 656 billion won.

SK bioscience’s actual expenditure for the acquisition is 263 billion won. This reduced amount results from Klocke Group’s concurrent purchase of a 1.9 percent stake in SK bioscience for 76 billion won, reflecting mutual trust and a long-term partnership between the two entities.

“We have built considerable trust with Klocke Group and agreed to maintain a long-term partnership,” Ahn said. “We aim to double IDT’s revenue and achieve an operating profit margin of over 20 percent by leveraging our combined expertise.”

This acquisition is expected to more than double SK bioscience’s topline. Last year, SK bioscience and IDT reported revenues of 370 billion won and 410 billion won, respectively. Ahn pointed out that 70 percent of IDT’s revenue comes from long-term contracts with major pharmaceutical companies, citing examples such as Takeda Pharmaceutical’s dengue vaccine ‘Qdenga’ and Amgen’s oncolytic virus therapy ‘Imlygic.’

Moreover, IDT has secured a contract with the German government to supply 80 million doses of vaccines annually for the next five years, indicating promising future performance.

The acquisition is expected to accelerate SK bioscience’s entry into new markets, including the U.S., Europe, and Brazil, where IDT has established networks. “Expanding vaccine facilities typically requires significant time investment, but with IDT’s existing plants in Germany and the U.S., we have effectively gained five years,” Ahn added.

Currently, 97 percent of SK bioscience’s revenue is derived from its own vaccines. To diversify its portfolio and explore new growth areas, the company plans to accelerate its development in the CGT sector. IDT has already established cGMP-level manufacturing infrastructure in the CGT field, with CGT accounting for about 8 percent of its revenue. Ahn expressed confidence in increasing this proportion to 30 percent, leveraging approvals from major regulatory agencies including the FDA and the EMA.

SK bioscience is also considering additional M&A opportunities to further expand its business. The company holds about 1.25 trillion won in cash and cash equivalents as of the end of the first quarter.

“We believe this is a favorable time for M&A. Following the IDT acquisition, we will actively seek other opportunities,” Ahn said.