Lotte Biologics has applied a platform for contract development and manufacturing (CDMO) of antibody-drug conjugates (ADC) at its Syracuse factory in the United States and has begun full-scale order-taking activities. Following the recruitment of a new CEO, support has also come from the third generation of the Lotte Group, with plans to finalize the first CDMO contract within this year.
James Park, CEO of Lotte Biologics, noted on the 16th (local time) at the 43rd JP Morgan Healthcare Conference (JPM) presentation in San Francisco's The Westin St. Francis Hotel that "we developed the ADC platform 'SoluFlex Link' in collaboration with the domestic ADC biotech firm Canap Therapeutics to thoroughly enter the ADC CDMO market and have signed a related memorandum of understanding (MOU) with one U.S. partner company."
Founded in June 2022, Lotte Biologics previously acquired a BMS factory (35,000 liters) in Syracuse, New York, before beginning construction of its first facility (36 liters) in Songdo, Incheon, in March last year. It aims to operate by 2027. Although it is in its third year of entering the CDMO sector, revenues are currently sourced only from the Syracuse factory, due to a three-year contract to maintain contract manufacturing (CMO) worth 280 billion won that BMS produced at this location.
However, considering that last year's cumulative revenue for the third quarter amounted to only 200.4 billion won, this suggests that this is merely a completion phase. A representative from Lotte Biologics also predicted that the company would continue to experience losses for the time being due to the construction of new production facilities.
In response, Lotte has recently recruited James Park as CEO to reorganize the business. Park was officially appointed as CEO of Lotte Biologics on the 10th after resigning from his position at GC Cell in November last year and passing the board of directors. He graduated from the University of California, Davis with a degree in chemical engineering and received a master's degree in industrial engineering from Columbia University. He has also held positions at MSD in the U.S., Bristol Myers Squibb (BMS) in the U.K., and served as the head of the global sales center (vice president) at Samsung Biologics.
The background for the CEO change points to the poor performance of former CEO Lee Won-jik. After being recruited by Lotte Holdings in 2021, Lee was responsible for laying the groundwork for the CDMO business. Despite pushing for the acquisition of the BMS factory and the construction of the Songdo first factory, he failed to secure orders due to a lack of overseas sales capabilities.
With the recent recruitment of a CDMO expert, Park's key task is to secure orders. He also said, "My mission is to secure orders within this year," adding that "we will appeal to global clients with high-quality production systems, starting with the New York Syracuse factory and the currently under-construction Songdo first factory."
Lotte Biologics has defined the contract production of ADCs centered on the Syracuse factory as its main business. ADCs, known as "guided missiles" that target cancer cells, are considered a key technology for next-generation cancer treatments, delivering drugs specifically to cancer cells by attaching them to antibodies, thus achieving higher therapeutic effects than existing cancer treatments while sparing normal cells from damage. Samsung Biologics is also focusing on ADCs as a new growth area and is set to begin production this year.
The company has also signed MOUs with two domestic and international corporations. Through a joint development contract with Canap Therapeutics in July last year, they developed the 'linker' and 'payload' ADC platform called SoluFlex Link. Lotte Biologics plans to apply SoluFlex Link to the Syracuse factory and start work toward obtaining Good Manufacturing Practice (GMP) certification essential for drug manufacturing in March.
Lotte Biologics aims to collaborate by delivering finished pharmaceutical products made from antibodies and ADC raw materials from the Syracuse factory to finished pharmaceutical CDMO partners located in the U.S. West and East, overseeing all stages from process development to production. This signifies the provision of end-to-end ADC services within North America.
When this factory was acquired in 2022, concerns were raised regarding the aging of facilities given that it had been built over 20 years ago. However, Park dismissed this issue, stating, "The Syracuse factory received flawless quality assessments with a zero defect level from last year's inspections by the Pharmaceuticals and Medical Devices Agency (PMDA) in Japan and regular audits by the U.S. Food and Drug Administration (FDA)." Park plans to check the operational situation of the Syracuse factory after the JPM schedule.
At this JPM, Shin Yoo-yeol, the eldest son of Shin Dong-bin, chairman of the Lotte Group, also made his first appearance. Starting in 2023, Shin has concurrently served as the head of the global strategy office of the pharmaceutical contract development and manufacturing (CDMO) subsidiary Lotte Biologics. This marks Shin's first participation in an official global pharmaceutical and biotech event.
On the first day of JPM, on the 13th (local time), Shin and CEO Park attended the opening ceremony followed by listening to main presentations from Roche, Johnson & Johnson (J&J), BMS, and held marathon meetings throughout the event. Shin is reported to have left San Francisco after completing the schedule by the 14th. Park stated, "The attendance of Vice President Shin was a tremendous support," adding, "I'm grateful for the various proposals given during the meetings with client companies."