SEOUL - South Korea's LG Life Sciences said next year it will start building a production plant in Osong, south of the capital city of Seoul, to produce cell-culture influenza vaccines based on the virus-like particle technology in-licensed from Novavax of the U.S.

"Construction of the plant will help LG Life Sciences to arm itself with better tools for the potential reoccurrence of any flu epidemic again in the future," LG Life Sciences spokesman Park Chul-ha told PharmAsia News. LG and Novavax inked the deal on Feb. 28.

Although Park noted that LG will pay upfront and milestone payments to Novavax for the use of its technology in Korea, he refused to disclose whether LG has agreed to pay sales-based royalties.

Cell-Culture Vaccines Preferred Over Egg-Based Vaccines

Park said LG has decided to develop cell-culture vaccines instead of egg-based vaccines because egg-based vaccines usually take six months to produce, a few months longer than cell-culture vaccines.

"LG will be selling the vaccines in Korea and in Asian countries while Novavax will be developing and then selling the vaccines in developed countries," Park said. "At this point, we don't know when we will be able to finish construction of the plant and when we will operate it."

Regarding the speculation that LG will produce 30 million doses of the vaccines annually, and will sell 15 million doses in Korea, Park said he could not confirm numbers.

"LG LS will help us advance our technology in Korea and other countries, consistent with our commercial strategy of developing regional partnerships and in-country manufacturing solutions with leading pharmaceutical companies around the world," said Novavax CEO Rahul Singhvi in a statement.

Shortly before news of the LG deal, the US Department of Health and Human Services released details of a vaccine technology contract with Novavax. The contract, worth $97 million over the first three years, will see Novavax develop insect cell vaccine production technology.

LG's move into vaccines comes after the Korean government announced last year that it would invest KRW 11 billion ($9.34 million) into vaccine R&D to enable South Korea to independently produce its own vaccines (Also see "South Korean Government To Build New Flu Vaccine Plant As Part Of Campaign For "Vaccine Independence" From Global Giants" - Scrip, 7 September, 2010.).

Meanwhile, Novavax has been trying to establish more strategic alliances with Asian companies including India's Cadila Pharma (Also see "Novavax Looks To Increase Runway Through Strategic Alliance With India’s Cadila Pharma" - Scrip, 21 April, 2009.).

Green Cross Opting For Egg-Based Vaccines

Unlike other companies that are producing cell-culture biologics, Green Cross said it is the only Korean pharma producing egg-based vaccines, and is armed with an annual capacity of 50 million doses.

Green Cross was the biggest beneficiary of the A/H1N1 flu pandemic in 2009 as increased demand for its vaccines triggered a remarkable upgrade in its rankings to the second-largest from its previous long-time fifth position (Also see "Demand For A/H1N1 Vaccine Catapults Green Cross Into No. 2 Spot In Korea; Company Ramps Up Biosimilar Pipeline" - Scrip, 3 February, 2010.).

Not surprisingly, Green Cross was less than enthusiastic about LG's move into vaccines.

"The moves by other local Korean companies such as LG and SK Chemicals to produce vaccines are bringing in controversies or worries now that [South Korea] will be faced with oversupply of flu vaccines in the future," Green Cross spokeswoman Han Jeong-Ah told PharmAsia News.

SK Chemicals signed an August 2010 memorandum of understanding with U.S.-based vaccine maker Xcellerex to produce cell-culture biologics in the future.

- Peter Chang (p.chang@elsevier.com)

South Korea's LG Takes Shot At Vaccines Via In-licensing Deal With U.S. Novavax

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