North Gyeongsang Province signs MOU to build controlled-drug industry hub in Andong

North Gyeongsang Province plans to invest about 175 billion won ($131 million) to build a controlled-drug industry hub in Andong, covering the full chain from hemp cultivation to active pharmaceutical ingredient and finished-drug manufacturing, quality control and safety management.

The province signed a memorandum of understanding Monday with Andong, Neocan Bio and the Regional Activation Investment Development Institute at Stanford Hotel Andong.

About 20 people attended the signing ceremony, including North Gyeongsang Province Governor Lee Cheol-woo, Andong Mayor Kwon Ki-chang, Neocan Bio CEO Ham Jeong-yeop and Regional Activation Investment Development Institute President Lee Jeong-hwan.

Under the MOU, the project will run from 2027 to 2030. The four organizations will build an integrated production system linking hemp cultivation to pharmaceutical manufacturing.

The production facility will be located in the North Gyeongsang Biotech Secondary General Industrial Complex in Pungsan-eup, Andong. The active pharmaceutical ingredient facility will be built to EU Good Manufacturing Practice standards, while the finished-drug facility will include a contract development and manufacturing organization line.

Andong has built a foundation in vaccine production and research and development centered on SK Bioscience. In June 2024, the city was designated, along with Pohang, as a national advanced strategic industry specialized complex in the biotech sector.

Since the province's special zone designation in 2020, it invested about 46.8 billion won between 2021 and 2024 to advance hemp cultivation, active pharmaceutical ingredient manufacturing and safety management verification.

An additional designation in June this year expanded the verification scope to include minor cannabinoids such as CBG, CBC and CBN.

Neocan Bio, the company leading the project, is a core participant in the special zone and a technology spin-off of the Korea Institute of Science and Technology. In April this year, the Ministry of Agriculture, Food and Rural Affairs selected it as the lead institution for a 5.7 billion won project to localize medical CBD active pharmaceutical ingredients.

The project is one of four initiatives under the 1.5 trillion won "Future Industry Foundry" program, which brings together local governments and regional companies to build production infrastructure. It is the third MOU signed under the program, following agreements in September covering robotics in Pohang with Neuromeka and a quantum systems project in Gumi with IonQ and SDT.

"We will advance our technology into a pharmaceutical production process that meets international standards, and move forward concretely on product development, regulatory preparation and cooperation with pharmaceutical companies," Ham said. "We will connect that to actual production and orders, and build an industrial ecosystem that grows together with Andong."

Andong Mayor Kwon said the city would ensure that its biotech industry foundation and experience from the hemp special zone translate into tangible results in pharmaceutical production. "We will spare no administrative support needed to establish the production facility and carry out the project on a stable footing," he said.

Governor Lee said the province would equip Andong with production facilities spanning raw material production through pharmaceutical manufacturing, along with rigorous quality and safety management systems, to make it a leading hub for the controlled-drug industry in South Korea.