[Pangyo Bio & Medical] Genome & Company to target the US CMO market

Genome & Company, a new drug development company that uses microbiome, is entering the microbiome drug contract manufacturing (CMO) market. It is a stepping stone for not only preparing a profit base, but also for entering the global market starting with the United States.

Genome & Company announced on Sep. 8 that it has acquired a 60% stake in the US CMO company List Labs for $27 million (about 31.4 billion won). List Lab is a bio company headquartered in San Jose, US, and has been in the CMO business of microbiome and bacteria toxin for 43 years.

Genome & Company CEO Bae Ji-su said, “Our goal is to achieve 100 billion won in CMO sales by 2025 by expanding the production facilities in List Labs. We are going to acquire 20% in the global microbiome CMO market share and become the leading company.”

The current production scale of List Labs is at a level that can produce reagents for use in clinical trials phases 1 and 2. The annual sales are around 100 billion won. Genome & Company is planning to expand its production capacity to a level that can conduct phase 3 and manufacture finished drugs by 2024. CEO Bae said, “The fund for expansion will come from List Labs. Genome & Company will not do a capital increase.”

Genome & Company acquired List Lab is to speed up its entry into the US market. Currently, most microbiome CMO companies are located in the Netherlands, Australia and France, where dairy farming is well developed. Because microbiome treatment uses live bacteria, the distance the drug moves is directly related to its quality. The shorter the distance traveled, the greater the competitiveness.

The rapid growth of the microbiome market is one of the reason for the acquisition. As the development of microbiome drugs became active, the demand for CMOs has surged. CEO Bae said, “Last year, the microbiome CMO market was 12% short of supply compared to demand. In 2024, it will be up to 40% short.”

Six companies including List Lab are leading the global microbiome CMO market. These companies take the market share of 70%. Unlike other biopharmaceuticals, microbiome CMOs must be able to culture various types of strains and have the technology to maintain live bacteria at a certain ratio or more. It is that difficult to get into the market. CEO Bae said, “We plan to grow into the world’s third-largest microbiome CMO company within three years and enter the East Asian market by 2030.”

With this acquisition, Genome & Company is praised for securing a stable revenue base. This is because it can generate sales through the CMO business during the development period of a new drug that takes at least five years. A company staff said, “With this acquisition, the production of clinical reagents will take place on time, reducing uncertainty about new drug development.”

Pangyo Technovalley is an innovation hub for global companies comparable to the Silicon Valley in the US, Zhongguancun in China, and STATION F in France. It is an Asia tech hub with 1,259 IT, BT, CT, and NT companies that possess innovative products and technologies. Located just south of the metropolitan area, it provides the best environment for Korean companies to do business with great transportation access and infrastructure.

Various high-tech companies are located in Pangyo Technovalley, and it is occupied by 64,000 full-time employees, many in their 20-30s. In terms of industry, the companies are engaged in information technology, contents technology, biotechnology, and nanotechnology.

With the support of innovative companies with global capabilities such as Kakao, Naver, AhnLab, Krafton, NCSoft, Nexon, and Hancom, companies in Pangyo Technovalley recorded 107 trillion won in sales last year. Investment and infrastructure growth in Pangyo is expected to continue, with the Metaverse hub entering Pangyo this year.

Source: Pangyo Techno Valley Official Newsroom 

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