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Samsung Biologics is capitalizing on the pandemic boom to expand in the US and Europe

Samsung Biologics, the biopharmaceutical unit of South Korea’s Samsung Group, is aiming to build its first facilities in the US and Europe to realign its global supply chains in the wake of the pandemic.

The world’s largest contract drug manufacturer, which manufactures for other global pharmaceutical companies, is cash-rich two years into the pandemic and reports a 35 percent jump in sales in 2021. Driven by rising demand for coronavirus treatments, US drugmaker Eli Lilly and British companies GSK and AstraZeneca, manufacturing backlogs rose 25 percent to $7.5 billion.

John Lim, the company’s chief executive officer, told the Financial Times that the company is looking to build plants overseas to be closer to its key customers and meet rising demand for contract manufacturing.

“The Covid situation has put greater emphasis on the need for diversification and risk management, particularly in the area of ​​supply chain management. It also highlighted the need to get things done quickly,” said Lim, who has run the company since December 2020.

He said demand for Covid antibody treatments is outstripping supply due to growing orders from US customers, although demand for Covid vaccines has fallen recently due to the Omicron variant. The company added that there have not yet been any significant supply disruptions due to the war in Ukraine.

The company signed a “fill and finish” deal with Moderna last May and began producing vials of Moderna’s mRNA vaccines in September. Beginning in April, it will also begin production of GreenLight Bioscience’s mRNA vaccine candidate, which is in phase three clinical trials.

The pandemic has helped the company quickly expand its product portfolio. It has diversified from its focus on monoclonal antibodies – molecules developed to fight cancer and autoimmune diseases – to offer products such as cell and gene therapies and next-generation vaccines using mRNA, which put it ahead of its Swiss rivals Lonza Group and Deutschlands Boehringer Ingelheim.

Column chart by product type ($ trillion) showing global pharmaceutical revenue

Lim said that biosimilars, which are cheaper than branded products, are spreading faster in Europe than in the US, citing more complicated patent and pricing issues in the US.

“But the US will also start to recover as all healthcare systems around the world are under greater pressure to cut spending and earn [treatments] more available to patients,” he said.

Samsung Biologics expects to double its market share for large-scale production of monochrome antibodies to 40 percent next year once its fourth $1.4 billion plant in Songdo comes online in October.

Global sales of biological medicines are estimated at $419 billion this year, still lower than their chemical counterparts at $542 billion, but the market is expected to grow 35 percent to $564 billion by 2026, according to research firm Evaluate Pharma US dollar grow.

However, custom manufacturing of biologic medicines requires higher investment and a sophisticated production process, which Lin says is similar to that of semiconductors because it shouldn’t be contaminated by bacteria.

Samsung Biologics was also on the hunt for takeovers. Recently, an agreement was reached to buy Biogen’s 49.9 percent stake in their joint venture Bioepis for $2.3 billion to bolster its biosimilars business, which is seen as a stepping stone to its long-term goal of creating its own new drugs to manufacture.

https://www.ft.com/content/e7db1c0f-2e68-418b-953b-b65f4d338b9b Samsung Biologics is capitalizing on the pandemic boom to expand in the US and Europe

Adam Bradshaw

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