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Moderna’s next steps in Korea…vaccine production scenarios
by Kim, Jin-Gu May 06, 2021 06:07am
The establishment of Moderna’s Korean subsidiary has begun. Moderna's business team from its U.S. headquarters had visited a factory of a domestic pharmaceutical company. The company's actions are adding strength to the speculation that domestic production of Moderna's vaccines is imminent. The factory that the business team had visited the previous month is expected to act as an outpost for Moderna’s vaccine production. On this, various scenarios on whether Moderna will directly take charge of vaccine production in Korea or will contract a domestic company to produce the vaccine are being raised in the industry. ◆'Establishment of ‘Moderna Korea’ … why enter Korea? According to industry sources on the 3rd, Moderna had posted an announcement on its website to hire a GM (General Manager) for Korea. Industry officials interpret this as the company's first step into establishing subsidiaries in Korea, Japan, and Australia as stated by the compnay on the 15th last month. The most likely purpose for entering Korea is to produce COVID-19 vaccines. Moderna has been producing 500 million doses of its vaccine annually at its U.S. and European plants. However, the whole amount of the vaccines produced by the two plants are being supplied locally. The production amount of the two plants is said to be tight and is just enough to meet the local demand. Therefore, vaccines for other regions must be produced in other factories. This is also true for the 20 million doses that the company agreed to supply to Korea. Moreover, in the case of the United States, the Defense Production Act fully controls the export of raw materials and equipment used in the production of COVID-19 vaccines, which gives strength to the theory that Moderna will produce vaccines in Korea. Moderna had posted a job announcement on its website to hire a GM for Korea. ◆Why Moderna’s business team visited A Pharmaceutical’s plant In mid-April, a business team from Moderna headquarters visited a plant of a domestic pharmaceutical company, A Pharmaceuticals. "I know that Moderna 's HQ visited and inspected A Pharmaceutical's plant and manufacturing facilities around 2 weeks ago,” said an industry official. However, whether the company has visited plants of other pharmaceutical companies remains unknown. Some are interpreting the visit as Moderna's move to secure a base for the domestic production of its vaccine. However, whether Moderna will be directly producing the vaccine, or will consign its production to a domestic company has not been decided yet. ◆Direct manufacturing or CMO… three possible scenarios The industry has been pushing three scenarios based on the two facts mentioned above. The first scenario is where Moderna takes over the A company’s plant to directly produce its vaccine. mRNA vaccines are largely manufactured in three steps. raw material manufacturing → lipid nanoparticle coating → finished product manufacturing. The key technology in the production of mRNA vaccines lies in the lipid nanoparticle coating process. When injected, mRNA quickly degrades in the body, therefore, the technology that surrounds it with lipid nanoparticles to keep it intact for a long period of time is important. Moderna has been known to pay extreme attention to the security of this technology. It has been using the direct production method to prevent technology leakage in the U.S. and Europe. On the surface, the company has signed a CMO deal with Lonza, a Swiss-based global CMO company, but then directly invested 70 million francs (about 86 billion won) and 40 million francs (about 49 billion won), in the U.S. and Swiss factory respectively. The industry views it as no different from direct production. In the same way, Moderna may start direct production of its vaccine by acquiring a share of a plant in Korea. The second scenario is that Moderna will make a CMO deal with a domestic company to produce the vaccine. Usually, global pharmaceutical companies do not use their own factories when establishing Korean subsidiaries. Most of the companies receive ‘import permits’ rather than ‘ manufacturing permits’ upon their establishment. Rather, in recent years, the trend has been for the subsidiaries to withdraw the already-established factories. Most recently, Janssen, as well as Bayer, Novartis, Abbott, Pfizer, Boehringer Ingelheim, Roche, and MSD previously had also withdrawn operation of their plants. This is why some believe that Moderna, like other companies, will not set up a factory in Korea. For Moderna, which owns only one type of vaccine, the factory is likely to remain a nuisance after COVID-19 ends. Accordingly, some speculate that the vaccine will be developed under a CMO deal with a domestic company. However, whether Moderna will make a technology transfer deal or participate in production by acquiring some of the domestic company’s shares is unknown. The third scenario is that Moderna will dualize the manufacturing process. Moderna will take charge of the core process, and then consign a domestic company for the last step, the fill&finish process. GC Pharma is a prominent candidate for Moderna's filling and packaging process. GC Pharma has already been selected as a CMO for COVID-19 vaccines by CEPI (Coalition for Epidemic Preparedness Innovations), a global private organization, in October last year. GC Pharma's manufacturing will take place in its Ochang plant, and the company plans to fill and finish more than 500 million doses. In addition, GC Pharma already has ties with Moderna. It has already signed a contract for the domestic approval and distribution of the Moderna vaccine. In this scenario, after the raw material is manufactured by Moderna and A Pharmaceutical company, filling, finishing and domestic distribution of the finished product would likely be handled by GC Pharma based on the relationship already established between the two companies.