'The Advance of Samsung Biologics'... "Annual Sales 3.6 Trillion Won, 20% Growth" Confirmed

Sales Expected to Reach 2.0145 Trillion Won in the Second Half
Second Upward Revision This Year

'Wind-Free Zone' Despite Global CDMO Downturn
Annual Orders Approaching 3 Trillion Won

Samsung Biologics continues to experience rapid growth alone despite the contraction of the global pharmaceutical contract development and manufacturing organization (CDMO) market. With the sales of its Plant 4, which began full operation in June, growing rapidly, the company has raised its annual sales forecast (guidance) twice this year alone, pledging a 20% growth compared to the previous year. This demonstrates confidence in achieving sales exceeding 2 trillion KRW in the second half of the year.

Incheon Songdo Samsung Biologics Plant 4 Exterior View [Photo by Samsung Biologics]

On the 4th, Samsung Biologics announced that it has raised its annual sales guidance for this year from the previous 15-20% to at least over 20%. Accordingly, the expected sales for this year have increased from 3.4515 trillion to 3.6016 trillion KRW (median value 3.5265 trillion KRW) to over 3.6016 trillion KRW. Considering that the total sales in the first half of this year were 1.5817 trillion KRW, the company expressed confidence that it can achieve sales of more than 2.0145 trillion KRW in the second half alone.

This is already the second time this year that the sales forecast has been raised. Samsung Biologics surpassed 3 trillion KRW in annual sales for the first time among domestic pharmaceutical and bio companies last year with sales of 3.0013 trillion KRW. In January, it set a sales guidance of 10-15% growth (3.3014 trillion to 3.4515 trillion KRW) for this year, and in April, it raised the guidance again to 15-20%.

In the securities industry, Samsung Biologics' sales for this year are also expected to be around 3.5353 trillion KRW. In particular, fourth-quarter sales are estimated at 1.0531 trillion KRW. In the relatively smaller domestic pharmaceutical and bio industry compared to the global scale, companies with annual sales exceeding 1 trillion KRW are classified as large enterprises, and there is an expectation that Samsung Biologics will achieve this within a single quarter. Furthermore, it is anticipated that next year the company will surpass 4 trillion KRW in annual sales, potentially reaching the dream figures of '4 trillion KRW in sales and 1 trillion KRW in operating profit.'

Samsung Biologics, the Only Company Continuously Raising Guidance... Expecting '1 Trillion KRW Quarterly Sales' in 4Q

Contrary to the global CDMO industry contraction caused by the global economic slowdown and the end of the COVID-19 pandemic, which led to reduced research and development (R&D) by bio ventures and decreased early-stage CDMO demand, Samsung Biologics is showing the opposite trend. Recently, major global CDMO companies such as Lonza, WuXi Biologics, and Catalent have been lowering their guidance, but Samsung Biologics alone continues to raise its guidance.

Lonza, a Swiss company that ranked first in global CDMO sales with 3.274 billion Swiss francs (about 4.9 trillion KRW) last year, recently lowered its guidance during the Q2 earnings announcement from 'high single-digit growth (7-9%)' to 'mid to high single-digit growth (4-9%)' for this year. WuXi Biologics has set a guidance of 30% growth compared to the previous year, but market consensus continues to decline. Catalent also lowered its guidance from 5.1 billion USD (about 6.9411 trillion KRW) last August to 4.275 billion USD (about 5.8183 trillion KRW).

Interior view of the bioreactor hall at Samsung Biologics Plant 3 in Songdo, Incheon [Photo by Samsung Biologics]

On the other hand, the key factor behind Samsung Biologics' solo continuation of such sales growth is Plant 4, which started full operation in June and has the largest single-plant production capacity of 256,000 liters. Samsung Biologics cited "increased sales due to the successful rise in Plant 4's operating rate" as the reason for raising its guidance. The operating rate of Plant 4 rose faster than expected as the company secured large contract manufacturing organization (CMO) agreements with big pharma companies one after another, leading to the upward revision of guidance. Including Plant 4, Samsung Biologics has secured the world's largest production capacity of 604,000 liters and maintains full operation of Plants 1 to 3 as well.

With total orders this year already reaching 2.092 billion USD (about 2.726 trillion KRW), the company is on the verge of achieving 3 trillion KRW in annual orders, and global big pharma companies are continuously being secured as clients. In 2018, only three of the global top 20 big pharma companies were clients, but this year alone, two new big pharma partners have been added, bringing the total to 14 clients including Bristol-Myers Squibb (BMS), Pfizer, AstraZeneca (AZ), Johnson & Johnson (J&J), Eli Lilly, Merck (MSD), Roche, and GlaxoSmithKline (GSK). However, the identities of the two new partners added this year have not been disclosed.

Additionally, factors that suppress the growth of other CDMOs are absent at Samsung Biologics, further supporting its growth. Apart from producing Moderna's messenger RNA (mRNA) vaccine drug product (DP) and GreenLight Biosciences' mRNA vaccine candidate drug substance (DS), Samsung Biologics has not been involved in vaccine production. While this was a risk during the pandemic, the uncertainty caused by the baseline effect disappeared after the transition to endemic. The contraction of investment by bio ventures has not been a major negative factor since Samsung Biologics focuses on mass production of commercialized drugs rather than early-stage production.

Although quality controversies have recently emerged, such as an increase in cases where regulatory authorities reject approvals or issue Complete Response Letters (CRLs) due to manufacturing plant issues during antibody drug approval processes, Samsung Biologics remains a 'safe zone.' Since its establishment, Samsung Biologics boasts a clean track record with no findings during inspections by the U.S. Food and Drug Administration (FDA). A company official stated, "Samsung Biologics' batch success rate is over 98%," adding, "As of the end of August, the cumulative number of regulatory approvals reached 231, demonstrating excellent quality control capabilities."

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