Subscribe
E-Paper
 |
| An SK Bioscience researcher tests vaccine candidates in this undated handout photo. Courtesy of SK Bioscience |
By Nam Hyun-woo
Growing questions over the COVID-19 vaccine being developed by AstraZeneca are casting uncertainty over the initial public offering (IPO) _ scheduled for early next year _ of the vaccine's contract manufacturer SK Bioscience, as it could affect the market value of the company.
Though the SK Group affiliate has a number of coronavirus vaccine candidates in its manufacturing backlog, and is developing its own COVID-19 vaccine, market watchers say a possible controversy over the clinical trials of the AstraZeneca vaccine may dent investors' high expectations for the company, which could affect its IPO price.
The "good news" is that the vaccine is getting a warm response from governments around the world. The company signed a deal with Thailand and the Philippines to supply a million shots of the vaccine to each. Plus, the South Korean government also agreed to buy the AstraZeneca vaccine as the number of COVID-19 infections has been growing here.
From SK Bioscience's standpoint, any failure in receiving approval for use of the vaccine will affect it greatly. AstraZeneca is currently in the final stages of clinical trials before seeking regulatory approval for broad distribution of the long-awaited vaccine, according to reports.
SK Bioscience's parent, SK Chemicals, recently experienced volatile sessions on the local stock market. The swing was interpreted as investors' concern that the controversy over AstraZeneca's COVID-19 vaccine may dent SK Bioscience's value, consequently affecting its parent's share price too. SK Chemicals holds a 98.04 percent stake in SK Bioscience.
AstraZeneca and Oxford University recently acknowledged a trial error after a number of scientists raised doubts about the validity of preliminary results that showed its vaccine had a 63 percent to 90 percent efficacy range with a 70 percent average. AstraZeneca CEO Pascal Soriot told Bloomberg that there would likely be an additional trial to check for any discrepancies.
The additional trial is mostly intended to make a fresh assessment of the vaccine's effectiveness. The AstraZeneca vaccine is viewed as a having considerable advantages over its rivals, including competitive cost and the fact that it can be stored at more reasonable temperatures.
SK Bioscience refused to comment on the vaccine issue, but added it was doing its utmost to fulfill its part as a contract manufacturer.
The Korean firm became a big name vaccine manufacturer after it bagged two major COVID-19 vaccine production deals. After signing the deal with AstraZeneca in July, it also signed a contract manufacturing deal with U.S. biotech Novavax for its COVID-19 vaccine in August.
Along with the manufacturing deals, its own COVID-19 vaccine, NBP2001, is already in clinical trials earlier, encouraging the company to move forward with an IPO.
SK Bioscience is seeking to make its debut on the domestic bourse in the first quarter of 2021. For this, the company selected NH Investment & Securities and Korea Investment & Securities as lead managers, and is expected to file for a preliminary review with the Korea Exchange by the end of the year.
Some brokerages are anticipating the company's value may reach 3 trillion won, but industry officials say the AstraZeneca mishap shows that SK Bioscience is also exposed to the uncertainties that pharmaceuticals and biotechs are bound to have.
"Though there can be some variables related to milestones, the general impact on the company's business will be limited, because SK Bioscience is in charge of manufacturing the AstraZeneca vaccine, not its development, trial and efficacy," an official at a domestic drug maker said.
"When it comes to the IPO, however, there could be an impact, because the valuation of drug makers and early-stage share prices are largely swayed by investors' expectations on the successful commercialization of key drugs or vaccines. There are many variables and unexpected factors in developing a drug or a vaccine, meaning there's no guarantee of success."
