LG Chemical Pharmaceutical Plant, Iksan, South Korea

The Iksan plant is owned by Lucky Goldstar Chemical (LG Chemical), a sub-division of one of South Korea's best known chaebols (business groups). LG decided to invest in the pharmaceutical plant as part of its strategy to expand into biotechnology and electronic materials such as rechargeable batteries.

Whereas Western companies tend to emphasise core competencies, chaebols have traditionally looked to increasing their diversification into a series of industries not necessarily closely related.

The company's strategy is to use petrochemicals as a cash cow with which to finance its investments in pharmaceuticals. LG Chemical expected pharmaceuticals to grow from 3% of revenues in 1999 to 10% of the company's revenues in 2006.

The plant is located in Iksan, which is in North Cholla province in the south western part of South Korea. In 2002 LG Life Sciences was formed into a separate division from LG Chemical and now trades as a separate entity.

Target markets

The pharmaceutical plant's product is very much geared to the East and Southeast Asia markets. Very important among these is the South Korean market itself, which is still very hard for foreign competitors to penetrate.

LG Chemical's Factive was approved by the US Food and Drug Administration in July 2003 after having successfully completed clinical tests involving more than 8,000 patients in 40 countries. Factive was approved to treat respiratory tract infections. Sales of Factive in the US began in 2004.

The FDA approval is important for the international influence it will have on Far East markets. The antibiotic itself is to be marketed by GlaxoSmithKline (GSK), as part of a long-term contract agreed in 1997.

The South Korean company has found the drug to be more popular than existing remedies because it is simpler to use. The new drug proved to be efficacious with just one daily dosage, compared to two dosages required by other quinolone class antibiotics. The treatment period of the new medicine is also shorter than existing quinolone antibiotics. The company claims that the drug is potent against strains which are able to resist other common types of antibiotics.

Pharmaceutical plant construction

Construction at the plant began in the second half of 1998, and it was commissioned in January 2000. The cost of building the new plant was Won 50bn (about $44.7m). The plant manufactures fluoroquinolone antibiotic pills under the brand name Factive, which is used to treat pneumonia, bronchitis and urinary tract infections.

Expansion

LG Chemical expanded its Iksan facilities with another pharmaceuticals plant in 2001–2 to develop and manufacture a hepatitis B treatment and also LG's ZANIDIP hypertension medication and EUTROPIN human growth hormone. In 2001, construction of a new plant at the Iksan site to manufacture Boostin, a bovine milk production enhancer developed by the company, was completed.

LG Chemical is diversifying into other forms of pharmaceutical drugs through a variety of partnerships with established pharmaceuticals companies such as Andys, Oscient Pharmaceuticals and Biogen Idec.

Factive antibiotic

Factive (gemifloxacin mesylate) is a synthetic broad-spectrum antibacterial agent for oral administration. Gemifloxacin is a compound related to the fluoroquinolone class of antibiotics and available as the mesylate salt in the sesquihydrate form.

Chemically, gemifloxacin is (R,S)-7-[(4Z)-3-(aminomethyl)-4-(methoxyimino)-1- pyrrolidinyl]-1-cyclopropyl-6-fluoro-1, 4-dihydro-4-oxo-1, 8-naphthyridine-3-carboxylic acid.

Each white to off-white, oval, film-coated FACTIVE tablet has breaklines and GE 320 debossed on both faces and contains gemifloxacin mesylate equivalent to 320mg gemifloxacin. The inactive ingredients are crospovidone, hydroxypropyl methylcellulose, magnesium stearate, microcrystalline cellulose, polyethylene glycol, povidone, and titanium dioxide.