November 26, 2014
By Mark Terry, BioSpace.com Breaking News Staff
Seoul, South Korea-based Hanwha Chemical announced yesterday that it had fired four top managers, including the CEO of its biotech unit, Paul Coleman. Other leaders let go were Park Sang-kyung, biotech research center head, and biotech business development head Kim Kyung-eun. Their responsibilities were focused on the development of biosimilar drugs.
Hanwha Chemical is part of the Hanwha Group, one of the largest business conglomerates in South Korea. It was founded in 1952 as Korea Explosives Inc., but has expanded into manufacturing, finance, chemical, biochemical, solar power and other areas. Hanwha Chemical has largely focused on developing polyethylene (PE) compounds, caustic soda and polyvinyl chloride products.
In related news, Hanwha acquired several of Samsung Group’s affiliations, including Samsung Techwin, Samsung General Chemicals, Samsung Total and Samsung Thales for $1.7 billion. An unnamed Samsung executive said in a CNET article, “We must throwaway unnecessary businesses and focus on our key growth areas, such as electronics.”
Samsung Techwin is a defense affiliate, focused on surveillance, aeronautics, optoelectronics, automations and weapons technology. Samsung Thales, which is a joint venture with France’s Thales International, builds military radar and ship battle command systems.
Hanwha, despite early successes in the biosimilar market, has struggled in that arena since. In 2012, Hanwha created a biosimilar for etanercept (Enbrel), a drug for rheumatoid arthritis made by Pfizer. Marketing was planned for 2013, but did not meet approval by the Ministry of Food and Drug Safety. Eventually it passed regulatory hurdles and began to be sold in November 2014.
The company has also had production difficulties with its facility in Osong, North Chungcheong Province. Four years after opening, it has yet to receive ministry approval for full production. Hanhwa had a biosimilar contract with Merck priced at $720 million that was canceled in 2012. In that deal, Merck and Hanhwa inked a worldwide licensing agreement that excluded South Korea and Turkey that would have lasted until the end of 2024.
This round of firings seems to be a reevaluation of the company’s biosimilar business. Lee Sang-hoon, currently a biosimilar unit head, has been named interim CEO of the biotech unit.
“We are not looking to expand the business, but we are not going to withdraw entirely, either,” said an unidentified Hanwha Chemical official in a statement. “This is just across-the-board review of our business.”
