Samba Hits 1.4 Trillion Won in First Half... Nearly Matches Last Year's Total Sales

Samsung Biologics Bioreactor Hall

[Asia Economy Reporter Choi Dae-yeol] Samsung Biologics (Samsung Bio) has signed a contract worth approximately 290 billion KRW for contract manufacturing with a global pharmaceutical company. Earlier in April, it signed a contract for contract manufacturing of a COVID-19 treatment with the US company ViroTechnology, achieving results amounting to 1.4 trillion KRW this year alone. This figure is nearly double the company's total sales last year (701.6 billion KRW). The stock price also showed strong momentum, rising 50% compared to the beginning of the year and more than doubling compared to a year ago.

According to the disclosure made by Samsung Bio on the 8th, on the 6th it signed a contract worth approximately 246.2 billion KRW for contract manufacturing of biopharmaceuticals with a pharmaceutical company based in Switzerland. Previously, under a contract signed with this company before its 2016 listing, Samsung Bio had produced and supplied pharmaceuticals, with an outstanding order balance of about 460 billion KRW remaining, which has now been increased to about 700 billion KRW through the new contract. Separately from this contract, a letter of intent for another contract manufacturing agreement was also signed. The deposit alone is 43.3 billion KRW, and if Samsung Bio meets certain conditions in the future, the contract amount could increase to 490 billion KRW.

Lee Jae-yong, Vice Chairman of Samsung Electronics, who is under prosecution investigation for allegations of unfair succession of management rights related to the merger of the former Samsung C&T and Cheil Industries, as well as allegations of accounting fraud at Samsung Biologics, is entering the courtroom to attend the warrant hearing held on the 8th at the Seoul Central District Court in Seocho-gu, Seoul. Photo by Kang Jin-hyung aymsdream@

In addition to the US company Viro, Samsung Bio secured contracts worth 184.5 billion KRW with Immunomedics, 283.9 billion KRW with GSK, and 184.2 billion KRW with another US pharmaceutical company, totaling 1.3838 trillion KRW in contracts in the first half of the year alone. These consecutive wins in the global market are interpreted as recognition of Samsung Bio's value, which focuses on contract development and manufacturing (CDMO) of biopharmaceuticals for domestic and international pharmaceutical companies. While some suspect that Samsung Bio's value was inflated during the merger of Samsung C&T and Cheil Industries, considering the growth trend of the biopharmaceutical market and the company's market capitalization, there are also opinions that it might have been 'undervalued.'

The pharmaceutical market is broadly divided into chemical pharmaceuticals and biopharmaceuticals, with biopharmaceuticals being the recently spotlighted sector. According to industry sources, the share of biopharmaceuticals in the total pharmaceutical market, which was about 18% in 2010, is expected to increase to 32% by 2024. Among the top 100 products by sales, biopharmaceuticals already account for more than half. An industry insider said, "The biopharmaceutical market is growing faster than any other market, and especially with the increase in bio ventures, the CDMO business growth is remarkable."

At the time of the merger between Samsung C&T and Cheil Industries, accounting firms valued Samsung Bio's worth held by Cheil Industries at between 3.9 trillion KRW and 7.2 trillion KRW. Considering that Cheil Industries held a 46% stake in Samsung Bio, this implied a company valuation of 9 trillion to 15.6 trillion KRW. The accounting firms explained that they evaluated the value based on future business conditions 5 to 10 years ahead. Samsung Bio's market capitalization, which was about 9.9 trillion KRW at the time of its listing in 2016, steadily increased to 24.5 trillion KRW the following year and currently stands at around 43 trillion KRW.

This content was produced with the assistance of AI translation services.