[THE INVESTOR] SK Chemicals said on Feb. 12 that it has signed an agreement to license cell culture technology to Sanofi Pasteur, the vaccines division of the French drug maker, in a deal worth US$115 million if all milestones are achieved.

“SK Chemicals could reach this agreement by our determined strategy focusing on premium vaccine development based on innovative technologies and it is proof that Korean vaccine technologies have reached global levels,” said SK Chemicals CEO Park Mahn-hoon.

The French firm will have exclusive rights to sell vaccines using the technology in the US and Europe.

Using this technology, SK Chemicals has commercialized both trivalent and quadrivalent cell culture-based influenza vaccines since 2015. The cell-based approach in future broadly protective vaccines could potentially speed manufacturing processes and increase production yields.

Under the deal, SK Chemicals will receive an initial upfront payment of US$15 million, and an additional US$20 million after the completion of the technology transfer. The potential milestone payments could be as high as US$120 million, as well as additional royalties on net sales.

Broadly protective vaccines are the next-generation influenza vaccines designed to protect against many strains of the virus over several years, by targeting the common sequences many flu viruses share. The key advantage will be broader coverage against several seasonal flu strains, according to Sanofi Pasteur.

The two companies have collaborated on the development of the next-generation pneumococcal vaccine since 2014.

Meanwhile, SK Chemicals said it plans to spin off its vaccine business to establish an independent entity.

“To become a premium vaccine developer, we have been making massive investments in research and development as well as infrastructure over the past 10 years and the efforts have started bearing fruits,” a company official said.

Although a detailed timeframe for the spin-off has not yet been decided, SK Chemical said it will pursue an initial public offering for the vaccine unit.

By Park Han-na (hnpark@heraldcorp.com)