pharm edaily

[Yoo Sung, Head of Edaily Bioplatform Center] Even the most technologically advanced and well-funded global corporations tend to avoid certain business sectors.

One such sector is the multi-product, small-batch production model, which is labor-intensive and yields relatively lower revenue and profits, making it unviable for large corporations that rely on economies of scale. Instead, they prefer mass production of a limited number of products.

Recognizing that multi-product, small-batch production is the Achilles’ heel of large corporations, a biotech company has built its success by leveraging this strategy from the outset. That company is ENCell, the leading domestic contract development and manufacturing organization (CDMO) specializing in cell and gene therapy (CGT).

CGT treatments are inherently personalized, making them ideally suited for a multi-product, small-batch production approach. However, these treatments come at a premium, often costing tens to hundreds of millions of won per dose. Since economies of scale do not apply, large corporations find it challenging to compete in this space. Capitalizing on this industry structure, ENCell has successfully secured 33 CDMO projects worth 40 billion won from 17 clients.

“A business model on multi-product, small-batch production”

On March 5, CEO Jang Jong-wook shared insights into ENCell’s dominant position in the CGT CDMO market during an interview at the company’s headquarters in Gangnam, Seoul.

“Unlike companies that expanded into CDMO as a new business, we built our company around the CGT CDMO model from the start, fully embracing multi-product, small-batch production. Over time, our accumulated track record and refined systems have become our biggest competitive advantage. These factors play a crucial role when clients select a CDMO partner, giving us a strong edge in securing contracts.”

Jang Jong-wook, CEO of ENCell. Photo provided by ENCell.

Jang emphasized that ENCell’s strategy of focusing on multi-product, small-batch production from the beginning effectively shields it from competition with industry giants.

While this approach may seem less profitable than mass production, it offers an opportunity to dominate a niche market. The competition is mainly among smaller firms, allowing a single company to emerge as the undisputed leader. ENCell has followed this trajectory to become South Korea’s No. 1 CGT CDMO.

Jang chose the CGT CDMO sector because he foresaw its significant growth potential in the third-generation biopharmaceutical market. A graduate of Kyungpook National University (bachelor’s and master’s in biochemistry) and the Gwangju Institute of Science and Technology (Ph.D. in life sciences), he is also serving as a professor in the Department of Convergence Medical Science at Sungkyunkwan University - Samsung Medical Center. With more than 20 years of expertise in stem cell therapy, he laid a strong foundation for ENCell.

Currently, the South Korean CGT CDMO market is estimated at 50 billion won, while the global market is projected to grow from $3.1 billion in 2023 to $17.4 billion by 2029 at a compound annual growth rate of 33.1%, according to Frost & Sullivan.

“Production quality matters more than quantity”

“For a bio-venture, securing contracts with global pharmaceutical companies like Novartis and Janssen signifies recognized global competitiveness.”

Jang noted that in the CGT CDMO sector, quality of production is far more critical than sheer production volume. This is why multinational pharmaceutical companies highly value ENCell.

The company is South Korea’s only CDMO capable of simultaneously manufacturing clinical-grade cell therapies and viral vectors (AAV). It operates GMP-certified facilities at Samsung Medical Center and in Hanam, Gyeonggi Province, ensuring global quality standards.

“Our strategy is to generate profits from the CDMO business and reinvest in new drug development, creating a self-sustaining cycle that will position us as a global CGT leader.”

Overseas expansion and next-generation stem cell therapy

ENCell researchers conducting research on cell and gene therapies. Photo provided by ENCell.

ENCell is also considering overseas expansion, particularly into Japan. Additionally, it is in talks with two to three partners in the United States to co-operate existing local plants as an initial entry strategy.

Beyond CDMO, Jang is focusing on next-generation stem cell therapy (EN001) as a future growth driver. EN001 is being developed for Charcot-Marie-Tooth disease and Duchenne muscular dystrophy and is expected to enter Phase 2a trials this year. The company has already demonstrated safety and statistically significant efficacy in a high-dose cohort of six Charcot-Marie-Tooth patients.

“Unfortunately, the market underestimates the growth potential of multi-product, small-batch production in advanced biopharmaceuticals. However, this sector presents a blue ocean opportunity for biotech ventures, where they can establish global competitiveness and evolve into world-class SMEs.”

With its unique business model and strategic positioning, ENCell is proving that even small biotech firms can outperform industry giants by playing to their strengths.