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THE INVESTOR
April 24, 2024

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After revenue milestone, Samsung Biologics presses home its advantage

  • PUBLISHED :October 27, 2023 - 09:54
  • UPDATED :October 27, 2023 - 09:54
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Samsung Biologics CEO John Rim pose for a photo at the company's booth at the Convention on Pharmaceutical Ingredients Worldwide 2023 held in Barcelona, Spain on Wednesday (local time). (Samsung Biologics)

 

Samsung Biologics is investing in new production facilities and exploring opportunities in new business areas after milestone revenue in the third quarter.

"Now is the time for us to prepare for the next phase with a new modality and overwhelming production capability," Samsung Biologics CEO John Rim said during a press conference on Wednesday, held in Barcelona in line with the company’s participation in the Convention on Pharmaceutical Ingredients (CPHI) Worldwide 2023.

This year has been the best one yet for Samsung Biologics, with sales in the third quarter exceeding 1 trillion won ($735 million) for the first time.

The company raised its expected on-year sales growth rate for 2023 twice to over 20 percent, while other global contract manufacturing organization (CDMO) peers faced macroeconomic challenges.

“(The company) will be able to maintain its growth rate (in the future),” the CEO said. “The existing Plants 1 through 3 are under near-full utilization, and Plant 4’s outputs are also growing,” Rim said.

The company is taking orders for Plant 5 as the company decided to speed up the construction.

Samsung Biologics currently aims to begin operation of Plant 5 in April 2025 and add three additional plants to its second Bio Campus.

According to its regulatory filing on Wednesday, Samsung Biologics announced that the company will invest a total of 7.5 trillion won for its second Bio Campus where three additional production facilities will be constructed. The sixth plant’s construction will be completed by 2027, while the other two will be finished in 2032.

When the four new plants are completed, their combined manufacturing capacity will reach around 1.3 million liters.

The possibility of building a new biomanufacturing facility in the US also remains as a viable option. Rim said Samsung Biologics is willing to build a new plant in the US if necessary, but the company currently is not planning on it.

Besides the company’s plan for capacity expansion, Rim also shared ideas on how its new plants will be used.

Rim first said that the company recently received approval from the board to build an antibody drug conjugate facility within its second Bio Campus. Rim expects the construction will be completed by the end of next year.

Rim also hinted at the possibility of producing other modalities at its new plants in the second Bio Campus. The second Bio Campus was originally intended to manufacture mainly antibody drugs. But Rim noted that the company can always repurpose new plants or add new facilities within the second Bio Campus, which has room for additional facilities.

The second Bio Campus is being built on around 360,000 square meters of land, which is around 30 percent larger than the first Bio Campus sitting on 274,000 square meters of land.

While expanding its manufacturing capacity and adding new modalities, Samsung Biologics will also strengthen its CDO business, according to Rim.

Samsung Biologics has been already in discussions with its existing big pharma partners to expand their partnership into the CDO area, Rim said. Samsung Biologics has newly appointed Min Ho-sung as the head of CDO Development Center at Samsung Biologics.

Rim also touched on his long-term vision of the drug development business. “I think the next phase will be drug development,” Rim said.

Rim said Samsung Biologics’ focus on its CDMO and biosimilar businesses has been successful, but there will be a limit to Samsung Biologics’ sales growth at a certain point in the future if the company continues to solely depend on those two businesses.

To grow into a company that can generate 40-50 trillion won of annual sales, the company will have to enter the drug development business eventually, he said.

Meanwhile, Samsung Biologics has joined CPHI Barcelona between Oct. 24-26 as the event’s official registration and welcome partner.

At this year's CPHI, Samsung Biologics has demonstrated its improved

chemical, manufacturing and control solution packages. The company also shared its latest expansion plans regarding the construction of its new Plant 5 and organized meetings with its global partners.

By Shim Woo-hyun  (ws@heraldcorp.com)

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