이 기사는 2021년 11월 12일 08:06 thebell 에 표출된 기사입니다.

CJ Cheiljedang Corp is speeding up restructuring of its biotechnology business to redirect its focus on the medical and pharmaceutical sectors, while ditching previous plans to expand into the agricultural biotechnology market.

CJ Cheiljedang, part of South Korea’s conglomerate CJ Group, earlier this week announced its acquisition of a 76% stake in Dutch biotechnology company Batavia Biosciences in a deal worth 195 million euros, or 267.7 billion won.

Batavia, founded by pharmaceutical company Janssen’s researchers in 2010, is a contract development manufacturing organization (CDMO) with capabilities to produce viral vaccines and vectors.

The cell and gene therapy CDMO market has been forecast to grow rapidly over the coming years, with big South Korean biotech firms like Samsung Biologics and SK Pharmteco actively increasing investments in this space. Batavia is among the top 10 companies in the global CDMO market.

The Batavia acquisition is part of efforts by CJ Cheiljedang to return the focus of its wellness business to red biotechnology, a division of biotechnology that is used in medicine and healthcare.

CJ Group chairman Lee Jay-hyun put emphasis on culture, platform-based services, wellness and sustainability as the conglomerate’s future growth drivers in his virtual speech to employees last week. In line with this direction, a team within CJ Corp, the conglomerate’s holding company, dedicated to mergers and acquisitions is leading deals involving CJ’s affiliates.

The South Korean conglomerate acquired Brazilian soy crusher Selecta in 2017, while selling its healthcare unit CJ Healthcare, now renamed HK inno.N Corp, for 1.31 trillion won ($1.1 billion) in the following year. The moves were seen at the time as a step toward expansion of its agricultural biotechnology business.

However, growth in this sector has been less impressive than expected over the past four years. Moreover, Ajinomoto, a Japanese food firm that CJ Cheiljedang has benchmarked, decided to exit the Brazilian soybean market, which reportedly affected the South Korean company’s decision to retreat from the agricultural biotechnology market. CJ Cheiljedang is currently in the process of finding a buyer for CJ Selecta.

Instead, CJ Cheiljedang acquired ChunLab, a Seoul-based bioinformatics company with microbiome analysis technology, for about 100 billion won in July this year, turning its eyes back to red biotechnology. With its takeover of Batavia, CJ Cheiljedang has also entered the cell and gene therapy CDMO market as a late mover.

Some raise concerns over an expensive valuation of Batavia even after considering the strong growth potential of the global CDMO market. The deal valued the Dutch company at 352.2 billion won, compared to its 2020 revenue of 30 billion won.

“Yposkesi, a French CDMO acquired by SK Pharmteco earlier this year, is similar with Batavia in many aspects,” an industry insider said. “Financial details were not disclosed, but I understand SK Pharmteco’s purchase price was far lower than what CJ Cheiljedang paid for Batavia.”

Another industry insider said, “The valuation of Batavia may seem a bit expensive, but that reflects CJ’s recognition of the company’s growth potential based on its strong talent pool and business network." (Reporting by Se-hun Jo)