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C&EN profiles SK Biotek, drug ingredients maker

Drawing on its parent company’s oil refining experience, the South Korean custom drug manufacturer steers its customers toward continuous processes

by Jean-François Tremblay
March 21, 2016 | A version of this story appeared in Volume 94, Issue 12


SK Biotek 的一位操作员在制药反应釜旁走动。
Credit: Jean-Francois Tremblay
图:SK Biotek位于韩国大田(Daejeon,South Korea)的工厂

SK Biotek at a glance

Headquarters: Daejeon, South Korea

Business focus: Custom manufacturing of active pharmaceutical ingredients

Plants: One in Daejeon; a larger facility ­under construction in Sejong, South Korea

Sales: $75 million in 2015

Headcount: 200

Parent company: SK Holdings, a major conglomerate with more than 80,000 employees worldwide

For its market positioning, SK Biotek could have easily adopted the same tagline as the rest of the South Korean industrial sector: quality on par with Japan or Western countries, at lower prices. But the fast-growing fine chemicals manufacturer chose to stray from this tried-and-tested playbook. Instead, it positions itself as a skilled producer of pharmaceutical ingredients made via continuous processes.

“In many cases, the continuous process is cheaper than the batch process,” says Jun-Ku Park, the firm’s chief executive officer. In a continuous-flow process, he notes, solvents can be recovered more easily and catalysts used more efficiently.

“Continuous processes are more suitable for extreme reactions,” he adds. Continuous processes are safer for plant workers because they are contained, Park says, so they are less likely to expose workers to toxic substances that might be used during production. And safety improves because reactions are better controlled.

Continuous processes aren’t a new idea in the pharmaceutical industry. Several drug companies have research programs aimed at replacing batches with continuous flows, and equipment makers have come up with tools to enable them. But so far, continuous processes have failed to establish themselves as standard operating procedure for synthesizing drug active ingredients. Tucked away in South Korea, SK Biotek stands out for its steadfast promotion of continuous flow.

“Our process development know-how derives from the refining and petrochemical industry; it’s part of the history of the company,” Park says. SK Biotek is part of SK Holdings, a huge conglomerate that employs more than 80,000 people worldwide and generates total annual sales of $157 billion. One of the group’s main companies is SK Innovation, South Korea’s largest oil refiner and chemical company. Park himself is a chemical engineer with a refining background who switched to pharmaceuticals.

SK Holdings expanded into pharmaceuticals two decades ago with the creation of a life sciences division. What is now SK Biotek began to custom-manufacture pharmaceutical intermediates in the mid-1990s and started making active pharmaceutical ingredients in 2009.

With sales of $75 million in 2015 and a payroll of 200 people, SK Biotek is one of SK Holdings’ smaller companies. But the business could grow in size and importance in the near future.

According to several news reports, SK Holdings is in acquisition talks with custom pharmaceutical manufacturers that would presumably be merged with SK Biotek. Park says the reports are basically correct. But one of the main goals would be to add finished dosage capabilities to SK Biotek’s chemical manufacturing assets, he says, adding that he can’t comment further on the reports.

Even without acquisitions, SK Biotek is growing rapidly. Sales will likely surge by one-third to $100 million this year, Park says. Business will further expand to $150 million when a second, and much larger, manufacturing facility in Sejong, South Korea, comes on-line next year.

Equipped to support continuous-flow manufacturing, the $70 million facility will also triple SK Biotek’s batch reactor capacity to almost 500 m3. Currently, all the company’s facilities are in Daejeon, 30 km south of Sejong. SK Biotek’s promotion of continuous synthesis notwithstanding, more than two-thirds of the company’s output comes from more traditional production methods.


Almost all of SK Biotek’s customers are from Western countries and Japan, according to Park. The company’s costs—and the prices it charges—are somewhere between those in Europe and China, he says. For customers, another advantage is the company’s geographic proximity to China because that’s where the world’s pharmaceutical industry sources most of its starting materials.

Within the pharmaceutical industry, South Korea is viewed positively, says Roger LaForce, a former fine chemicals company executive who now runs LaForce Business Solutions. The country, he notes, is home to innovative biopharmaceutical firms and an advanced chemical industry. And South Korea is perceived as having an overall level of economic development similar to Japan and Western countries, he says.

But SK Biotek faces an uphill battle convincing its customers to select continuous synthesis, LaForce says. It’s true that the method offers a lot of advantages. It is preferred for conducting hazardous reactions such as hydrogenation, he notes. For this and other reasons, he notes, many drug companies and contractors have studied, if not developed, continuous processes.

The leading custom pharmaceutical manufacturer, Lonza, for instance, announced in 2012 that it was investing in continuous-flow processes at its main site in Visp, Switzerland. The new facilities focus on chemical reactions in “extreme conditions” and can produce ton quantities of pharmaceutical chemicals. LaForce, who observed Lonza’s continuous-flow facilities in 2013, says the company’s expertise in the area is “strong.”

And Hovione, another custom drug maker, announced a few days ago that it was building a continuous-process plant in New Jersey. The facility will produce finished dosage pills on behalf of the drugmaker Vertex Pharmaceuticals.

But continuous synthesis, LaForce says, typically makes business sense for making chemicals on a large scale. The process makes less sense for the production runs of 500 metric tons per year or less that are typical in the drug industry. Hovione’s contract with Vertex, for instance, will represent only a small portion of Hovione’s total sales.

And it’s mostly companies that haven’t yet advanced to commercial launch of a drug that could be tempted by a continuous process, LaForce says. After a drug firm has obtained regulatory approval to launch a new drug, it’s typically too late to economically change a manufacturing process.

Park responds that most of SK Biotek’s customers are large drug firms with molecules that are entering Phase II clinical trials, a stage at which the manufacturing has not yet been scrutinized by regulators. SK Biotek has a pilot plant that can both test continuous synthesis and provide active ingredients for use in clinical trials, he notes. And, Park believes, continuous processes often make sense for small production runs, depending on the chemistry involved. Beyond possible financial savings, he says, continuous processes improve quality and safety.

As a result, companies that opt for a continuous process may face an easier time with regulators, Park notes. The U.S. Food & Drug Administration, for example, has for several years encouraged drug manufacturers to consider continuous flow.

In a batch process, Park notes, more human intervention is required, increasing the possibility for error. Continuous flows are by definition more automated. Over the past three years, SK Biotek was inspected by U.S., Japanese, and European regulators who, Park claims, found little that required improvement.

Although most of SK Biotek’s customers come for its batch processing capabilities, Park is confident that continuous synthesis will gain traction. By the time the company’s new plant opens in 2017, he expects that most of its output will be from continuous-flow operations.


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