John Lim "Our Competitiveness Lies in Speed and Talent Development... Production Capacity Already Secured"

Published 14 Jun.2022 18:17(KST)

[San Diego (USA) = Asia Economy Reporter Lee Chun-hee] Samsung Biologics, which has risen to the world's No. 1 company in the contract manufacturing organization (CMO) sector, actively expressed its determination to solidify its top-tier position across the entire contract development and manufacturing organization (CDMO) field by combining contract development organization (CDO) with CMO through Samsung's 'speed strategy.'

John Rim, CEO of Samsung Biologics, at a press conference held on the 13th (local time) in San Diego, California, during the opening of the ‘Bio International Convention 2022 (BioUSA),’ stated, "Samsung Biologics' greatest competitive advantage is speed," highlighting the global largest production capacity secured through Samsung Biologics' shortest factory construction period as its biggest strength.

CEO John Rim emphasized, "While others take four years to build a factory, we have made it possible within two and a half to three years," and added, "After constructing three factories within seven years of business entry, we are about to partially operate the world's largest fourth factory."

Currently, based on factories 1 to 3, Samsung Biologics' production capacity is 364,000 liters, and with the partial operation starting this October and full operation beginning next year, the total will rise to 620,000 liters, securing a dominant position accounting for 30% of the global total CMO production volume. CEO John Rim declared, "In terms of CMO production capacity, it seems we have already taken the lead."

Recently, Samsung Biologics signed its first CMO letter of intent worth $81 million (approximately 100.5 billion KRW) with Novartis, a global pharmaceutical company ranked 5th worldwide by sales last year, successfully securing more than half of the top 10 global big pharma companies as clients. According to GlobalData, last year's big pharma sales ranking was Johnson & Johnson, Pfizer, Roche, AbbVie, Novartis, Bayer, Merck, GlaxoSmithKline (GSK), Bristol-Myers Squibb (BMS), and Sanofi. Samsung Biologics had existing partnerships with Johnson & Johnson, Roche, Merck, GSK, and BMS, and has now succeeded in adding Novartis as a client. However, considering that this only includes companies that disclosed contracts publicly, there may be more contracts with big pharma companies not yet disclosed.

Regarding inquiries about order acquisition strategies for companies not yet contracted, he emphasized, "We are steadily targeting them." He said, "Two to three years ago, GSK, Merck, and Novartis were not clients, but now they are. Big pharma companies have demand for commercialized products, and if we continue to expand our production capacity, we can keep working together."

CEO John Rim cited the secret to securing production capacity as the 'parallel construction method.' This technique involves placing orders for critical core equipment inside the plant first, then simultaneously carrying out external construction and internal equipment installation. Samsung Biologics explained that through this method, despite the biopharmaceutical plant being much more complex than a typical chemical plant, the construction period was shortened by about 40%.

Having gained experience at big pharma companies such as AstraZeneca, Genentech, and Roche, CEO John Rim stressed the need for talent development to maintain the growth of Korea's bio industry. He stated, "The most important factor for Samsung Biologics' continued growth is talent development," and asserted, "Factories can be bought with money, but talent development cannot," adding that they are continuing to contemplate this issue.

Overview of the Samsung Biologics promotional booth set up at the San Diego Convention Center in San Diego, USA, where BIO International Convention 2022 (BIO USA) is being held / San Diego, USA - Photo by Lee Chunhee

As a resource for growth, he also mentioned Samsung Group's recently announced investment plan of 450 trillion KRW. Samsung Group plans to invest 450 trillion KRW (360 trillion KRW domestically) by 2026, designating bio as one of its core businesses. The ambition is to develop bio into the 'second semiconductor miracle.'

Regarding this, CEO John Rim said, "There is no specific amount decided yet on how much of the 450 trillion KRW will be invested in the bio sector," but added, "Samsung Biologics is the 4th largest by market capitalization in Korea," and "Since the market is sending a message to keep growing, investment will naturally follow."

On new fields such as cell and gene therapy (CGT), which have recently become a hot topic in the industry, he took a cautious stance. He said, "There are not many patients yet," emphasizing that it is a "small market." However, recognizing that demand clearly exists, he revealed a strategy to respond by building the 5th plant, for which land has been secured next to plants 1 to 4, as a 'multi-modal' facility capable of producing various pharmaceuticals including CGT and mRNA vaccines.