SK bioscience's net profit falls 12.7 percent on year in Q2

SK bioscience's net profit fell 12.7 percent on year to 46.1 billion won ($35.4 million) in the second quarter due to reduced contract manufacturing organization (CMO) orders.  

That still beat the market consensus of 45.1 billion won as compiled by FnGuide.

Quarterly revenue came in at 138.3 billion won, down 4.4 percent on year. That fell slightly short of the market expectation, which was 140.1 billion won.

Operating profit stood at 61.2 billion won, beating the market expectation of 57.5 billion won.

"The CMO deal with AstraZeneca ended in December, so profit declined," Cho Hoon, the head of the international relations team at SK bioscience, said during a conference call Thursday.

Sales breakdowns were not disclosed, though Cho explained that "most of the profit came from CMO orders from Novavax."

SK’s relationship with Novavax began two years ago, when the Korean company signed a CMO deal for Nuvaxovid, Novavax's Covid-19 vaccine. In February 2021, SK got the exclusive rights to sell the vaccine in Korea.

Analysts forecast that the company's profits will grow in the second half, and more in 2023, since the sales of SKYCovione will likely start in earnest.

SKYCovione is SK bioscience's Covid-19 vaccine that won use approval from the Ministry of Food and Drug Safety on June 29. It is the first domestically-developed vaccine.

In March, the company signed a 200-billion-won deal with the Korea Disease Control and Prevention Agency for 10 million doses of SKYCovione to be administered domestically.

"Demand for Covid-19 vaccines is on the constant rise with the outbreak of various variants," said Lee Tal-mi, an analyst at SK Securities. "SKYCovione turned out to be efficient against Omicron variants,"

Analyst Wi Hae-joo from Korea Investment and Securities wrote in a recent report that the company can profit 732 billion won from the sales of SKYCovione in 2023.

SK bioscience aims to apply for use approvals for the vaccine from global health authorities, including the European Medicines Agency and the World Health Organization, within the year.

SK bioscience has also been undergoing Phase 3 clinical trials of SKYCovione as a booster shot, and the results are expected to be announced as early as the first half of next year. 

BY SARAH CHEA [chea.sarah@joongang.co.kr]