US$5 Billion Worth of Vaccines to Be Produced in Korea

A consortium of Korean pharmaceutical companies has been formed to produce Russia's Sputnik V COVID-19 vaccine.

Korus Pharm has formed a consortium to produce Russia's Sputnik V COVID-19 vaccine.

Korus Pharm signed a memorandum of understanding with seven Korean companies on Feb. 25 to launch the consortium. The seven included Binex, ISU Abxis, Boryung Biopharma, Chong Kun Dang Bio, Quratis, Humedix and Andong Animal Cell Demonstration Support Center. The consortium is currently discussing supply prices and production schedules with the Russian Direct Investment Fund.

According to Korus Pharm, the consortium will produce 500 million doses of the vaccine. Although the cost of vaccination differs from country to country, the production volume is expected to be equivalent to US$5 billion given that the cost per inoculation in Russia is US$10.

Its difference from the production cost is likely to become the eight companies’ profits. South Korean vaccine manufacturers’ annual sales costs are 45 percent to 65 percent, those of contract manufacturers supplying biopharmaceutical products are 50 percent to 70 percent, and the companies can take 40 percent to 50 percent given the average. The net profit per dose is estimated at 10 percent to 30 percent. In short, they can earn US$500 million to US$1.5 billion by supplying 500 million doses.

The production volumes and capacities of the eight companies are all different. For example, Korus Pharm is capable of producing up to 4,000 liters by operating more cell incubators in Chuncheon. Binex is planning to use its 5,000 liter production lines in Osong to produce the Russian vaccine. ISU Abxis can produce 1,000 liters a year in Yongin and increase the volume as it currently has three 1,000 liter production facilities in total. The South Korean government is yet to decide whether to import the Russian vaccine and the vaccines produced by the companies will be exported to Russia, Iran, Argentina, Algeria, Hungary and the United Arab Emirates.

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