SK bioscience's successful M&A

Foreign subsidiary sales surpass those of the parent company

IDT Biologika, SK bioscience's subsidiary acquired 2 years ago, accounts for 76% of sales

Securing new growth drivers with cash accumulated during pandemic… proving effective in defending performance

The sales share of SK bioscience’s German contract development and manufacturing organization (CDMO) subsidiary has reached nearly 80%. By deploying funds secured during the COVID-19 pandemic into mergers and acquisitions (M&A), the company has strengthened its financial position and improved its defense against market pressures.

According to SK bioscience, on the 7th, IDT Biologika’s first-quarter sales reached KRW 128.3 billion, an 8.5% increase from the same period last year.

IDT Biologika is a German biotech company acquired by SK bioscience in 2024. SK bioscience purchased a 60% stake in IDT Biologika, previously held by the German biopharmaceutical firm Klocke Gruppe, through a wholly owned German subsidiary. The total acquisition price for IDT Biologika amounted to KRW 370.0 billion. SK bioscience decided to allocate paid-in capital to a third party, issuing 1,519,543 new shares worth KRW 75.7 billion to the Klocke Gruppe. Consequently, the total cash invested by SK bioscience in the acquisition of IDT Biologika is KRW 294.3 billion.

Sales of SK bioscience and IDT Biologika (unit: KRW 100 million, source: SK bioscience) BLUE: SK bioscience, GREEN: IDT Biologika

Founded in 1921, IDT Biologika is a major biotech company operating CDMO businesses in Germany and the United States. It has a track record recognized by more than 10 core drug regulatory agencies, including those in the U.S. and Europe. The company develops processes and analytical methods while producing drug substances (DS) and drug products (DP) across the entire vaccine and biotech spectrum from clinical to commercial stages, employing approximately 1,800 people.

IDT Biologika’s performance began to be reflected in SK bioscience’s consolidated financial statements starting from the fourth quarter of 2024. Revenue from IDT Biologika of KRW 111.2 billion was recognized in Q4 2024, and last year it recorded revenue of KRW 465.7 billion.

With the inclusion of IDT Biologika’s results, SK bioscience’s revenue surged. In the first quarter of this year, SK bioscience’s revenue expanded more than sevenfold compared to the first quarter of 2024.

SK bioscience faced significant fluctuations in performance throughout the COVID-19 pandemic.

In 2020, SK bioscience signed a contract manufacturing agreement with AstraZeneca to produce and supply COVID-19 vaccine drug substances and finished products. In the same year, SK bioscience signed a tripartite agreement with the Ministry of Health and Welfare and Novavax to supply the COVID-19 vaccine 'NVX-CoV2373,' beginning full-scale contract manufacturing and supply in 2021.

SK bioscience’s sales in the first quarter of 2020 was only KRW 22.7 billion. Then, it jumped nearly fivefold over the year to KRW 112.7 billion in the first quarter of 2021, and then rose to KRW 450.9 billion in the fourth quarter of 2021.

However, as the contract manufacturing performance for COVID-19 vaccines dissipated, sales dropped. In the first quarter of 2023, SK bioscience’s sales amounted to KRW 20.6 billion, a 95.4% reduction compared to the fourth quarter of 2021.

While sales fell sharply after the end of the pandemic, the M&A strategy successfully minimized the sales gap. In the first quarter of this year, IDT Biologika accounted for 76.1% of SK bioscience’s total sales. IDT Biologika’s sales were more than three times higher than SK bioscience’s separate sales of KRW 40.3 billion.

From the fourth quarter of 2024 to the first quarter of this year, IDT Biologika’s cumulative sales reached KRW 705.2 billion, accounting for 72.2% of the parent company's sales.