April 24, 2024

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[THE INVESTOR] Samsung BioLogics, a contract drug manufacturing unit of Samsung Group, has signed an 8.6 billion won (US$7.43 million) contract with a Swiss drug maker to supply its products, the South Korean company said on Jan. 25.

The company didn’t identify the name of the contract counterpart, saying it works on “medication production of a Swiss-based pharmaceutical firm,” in a regulatory filing.

But sources said BioLogics will collaborate with Roche again, which is already one of the contract drug maker’s biggest clients.

Further terms of the agreement, including financial terms and products to be manufactured, were not disclosed. The contract ends on Dec. 31, 2018.

With the new deal, BioLogics is expanding its partnership with Roche following a 10-year “long-term strategic manufacturing agreement” inked by the two in 2013.

Roche has a broad range of biologics development portfolio, which includes some 140 products in clinical trial stage, focused on oncology and immunology.

The pipeline also includes three Alzheimer’s disease treatments, one in phase 1 and two in phase 3 clinical studies, the area which Samsung has been hoping to work on, in particular.

This is the first contract that BioLogics has publicly announced since the company said that it is in talks over new supply deals with 15 global pharmaceutical companies for over 30 products at the JP Morgan Healthcare Conference held in the US on Jan. 10.

“Samsung Biologics saw its bio contract manufacturing sales kick into high gear in 2016 and we expect the company will win additional CMO contracts in 2017,” said Brian Lee, an analyst at Samsung Securities.

Currently, Biologics has a CMO order backlog of US$2.9 billion.

On Jan. 24, the firm said it narrowed its operating loss by reporting 30.4 billion won in 2016, reducing by 85 percent over a year ago. Its annual revenue surged over 220 percent to 294.6 billion won.

The company has yet to turn an operating profit since it was set up in 2011.

By Park Han-na (hnpark@heraldcorp.com)