● SK chemicals Follows Separately and Together 3.0 Initiative for Drug Development

- Working with SK Biopharmaceuticals for simultaneous drug development
   Korea and the U.S.
- The first fruit of the SK Group’s Separately and Together 3.0
   management campaign.
- Improving quality of life with a fundamental treatment for constipation
   and the irritable bowel syndrome

SK chemicals (led by CEO Lee In-seok) is poised to lead the SK Group’s Separately and Together 3.0 management campaign by example.

SK chemicals announced on May 8 that it recently signed an agreement at the company’s building in Pangyo with SK Biopharmaceuticals, an international pharmaceutical arm of the SK Group, to pursue collaborative drug development projects.

The agreement marks the first occasion of cooperation between the two companies, and will also be remembered as the first specific manifestation of the SK Group’s Separately and Together 3.0 management philosophy. The Separately and Together 3.0 management campaign constitutes a core strategy of the SK Group for enhancing both the member companies’ autonomy and synergy.

According to the agreement, SK chemicals will conduct the second and third phases of clinical trials on YKP10811, a new drug being developed by SK Biopharmaceuticals, and launch it on the Korean market by 2018. SK Biopharmaceuticals, for its turn, will proceed with clinical trials and licensing works in the United States so that the drug can be launched there by 2017.

YKP10811 is an innovative drug chosen for development under the Government-wide New Drug Development Project launched in December. The drug has proven to be very effective in treating both the irritable bowel syndrome and constipation in animals, and is expected to become a great success on the international market.

SK chemicals and SK Biopharm intend to conduct clinical trials of the drug under different conditions in Korea and abroad. More specifically, SK chemicals will test its effect for treating the irritable bowel syndrome with constipation, while SK Biopharmaceuticals will test its effect as a treatment for chronic constipation.

Once the drug is approved as a treatment for chronic constipation in the United States, it can also be sold under that label in Korea with minimum clinical trial preparations. Conversely, should additional approval for the drug be required in the United States, the data from clinical trials in Korea may also be submitted.

CEO Lee In-seok of SK chemicals and CEO Christopher Gallen of SK Biopharmaceuticals agreed: “The Separately and Together 3.0 campaign of the SK Group is designed to grant autonomy to each and every member company of the group, while also promoting the synergy among those companies when necessary. The close collaboration between SK chemicals and SK Biopharm will allow them to lead the international market in the future.”

There were approximately 1.64 million patients of the irritable bowel syndrome in Korea as of the end of 2011, according to the Annual Health Insurance Statistics Review. About a quarter of them, or 410,000 or so patients, also suffer from constipation.

The known treatment for the irritable bowel syndrome accompanying constipation has been vanished from the market since 2007 due to the cardiovascular complications it was known to cause. Patients have been thus left to rely on anticonvulsants* and laxatives* for their symptoms, even though they desperately need proper and fundamental treatments.

SK chemicals launched Levopride® in 1996 as a treatment for promoting the activities of the gastrointestinal system. Furthermore, the company also launched the Omed antacid in 1999 as a treatment for the ulcer of the stomach, thus consolidating its portfolio of treatments for the digestive tract. Currently engaged in the second-phase clinical trials of YKP10811 as a treatment for the irritable bowel syndrome, SK chemicals is set to emerge as an indisputable leader of the treatments for digestive problems in Korea by the time the drug becomes ready for marketing in 2018.

The irritable bowel syndrome causes repeated stomachaches and other changes to the excretion pattern. It is also known to cause constipation, diarrhea, or both by turns.



[Caption] CEO Lee In-seok of SK chemicals (right) and CEO Christopher Gallen of SK Biopharmaceuticals (left) take a photo together to mark their agreement on collaboration.

About the Company

SK Biopharmaceuticals Inc.
An international pharmaceutical arm of the SK Group, SK Biopharmaceuticals has its headquarters in Seoul, but develops a variety of innovative drugs at the Daedeok R&D Cluster in Daejeon as well as in New Jersey. The company also operates a research and development division in Shanghai. The company is currently engaged in the second-phase clinical trials of a number of drugs in the United States, including: YKP10811 for treating chronic constipation and the irritable bowel syndrome; YKP3089 for treating epilepsy; and SKL11197 for relieving pain. YKP10811 and YKP3089, in particular, are being developed with support from the Korean government as part of the Government-wide New Drug Development Project. Based on its world-class research capability, the company creates at least one new clinical substance each year. The company has received clinical trial approval from the U.S. FDA on 13 of its inventions. (www.skbp.com)

Terminology

Anticonvulsant
A drug designed to calm down the expanding and contracting motions and/or the seizure of the smooth muscles in the gastrointestinal tract. The drug is used to relieve pain associated with abnormal movements of the gastrointestinal tract, and may also supplement treatments for the irritable bowel syndrome, acute enteritis, and ulcers.

Laxative
A drug designed to relieve constipation by stimulating the release or discharge of waste from the intestinal tract.