Samsung Biologics Increases Immuno-Oncology CMO Contract with BMS by 38 Billion KRW...380 Eok Up

380 Billion Won Increase in Contract Just One Week After Signing

Samsung Biologics expanded the scale of its contract manufacturing organization (CMO) agreement with Bristol-Myers Squibb (BMS), its 'first client,' within a week.

Exterior view of Samsung Biologics Plant 3.
[Photo by Samsung Biologics]

On the 25th, Samsung Biologics disclosed a change, stating that it increased the $242 million (approximately 321.3 billion KRW) immuno-oncology CMO contract signed with BMS on the 18th by $28.65 million (approximately 38 billion KRW), raising the total to $270.64 million (approximately 359.3 billion KRW).

The company explained, "The scale of contract manufacturing was increased at the customer's request." However, specific product names and detailed increase information were not disclosed due to contractual obligations with the client.

The party to this increased contract is Swords Laboratories Unlimited Company, a subsidiary of BMS. BMS is the world's 7th largest pharmaceutical company by sales last year, with a market capitalization of about 200 trillion KRW. Through this contract, Samsung Biologics' Plant 4 will be utilized as a production base for BMS's main immuno-oncology products for the next seven years.

There is also a possibility that the contract scale will increase further. Samsung Biologics' CMO contracts are usually conducted in the form of minimum total order quantity protection (MTOP), so contract amounts and volumes can vary depending on the customer's demands and circumstances. The company explained that there is a possibility of further increases in the contract scale with BMS in the future.

Previously, big pharma companies that signed contracts with Samsung Biologics have been strengthening partnerships by expanding contracted products or increasing production volumes of already contracted quantities. Novartis, which signed a letter of intent (LOI) worth 100 billion KRW with Samsung Biologics in June last year, signed a main contract in July this year, about a year later, increasing production scale about fivefold to 511 billion KRW. Among the 11 contracts disclosed last year, 7 were increased contracts, totaling 880.5 billion KRW.

John Lim, CEO of Samsung Biologics.
Photo by Samsung Biologics

Samsung Biologics explained that this increase decision was made based on mutual trust between the two companies. BMS became Samsung Biologics' first client after it started its CMO business, and since then, they have maintained a partnership for over 10 years by signing new and increased contracts. The background for the long-term partnership with BMS is interpreted as Samsung Biologics building customer trust based on the world's largest production capacity, fast production speed, and stable yet high quality. Additionally, President John Rim's management style prioritizing customer satisfaction is also evaluated as a key factor.

Based on this competitiveness, Samsung Biologics continues to expand new and increased contracts not only with BMS but also with major global big pharma companies. According to Samsung Biologics, it has secured 14 out of the top 20 global big pharma companies as clients so far. The high utilization rate of Plant 4 also supports this growth trend. Plant 4, which began full operation in June, has a capacity of 240,000 liters, and with increasing large-scale orders centered on big pharma, it is recording a high utilization rate. Sales from Plant 4 are expected to be reflected starting from the third quarter results this year.

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