'The Tempest of Samsung Bio'... 'Quarterly Sales of 1 Trillion Won' Marks a New Industry Record

Last Year's Annual Sales of 3 Trillion Followed by Consecutive Milestones
Continued Solo Growth Despite Global Economic Slowdown
'World's Largest Single Standard' 4th Factory Effects Fully Realized

Samsung Biologics has made new history in the pharmaceutical and bio industry by achieving quarterly sales of 1 trillion KRW. As the effect of operating Plant 4, the world's largest single factory, begins to take full effect, the company continues to grow undeterred despite the contraction of the global Contract Development and Manufacturing Organization (CDMO) industry.

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

On the 26th, Samsung Biologics announced that its consolidated sales for the third quarter of this year reached 1.034 trillion KRW, with an operating profit of 318.531 billion KRW. Sales grew 18.4% compared to the same period last year, surpassing market expectations of 960.9 billion KRW and marking the first time in the domestic pharmaceutical and bio industry that quarterly sales exceeded 1 trillion KRW. In the relatively smaller domestic market compared to the global scale, companies with annual sales exceeding 1 trillion KRW are classified as large enterprises, but Samsung Biologics not only surpassed 3 trillion KRW in annual sales for the first time last year but also consecutively achieved the milestone of 1 trillion KRW in sales in a single quarter. Although operating profit decreased by 1.9% compared to the same period last year, it exceeded the market expectation of 288.9 billion KRW.

Cumulative sales up to the third quarter reached 2.6211 trillion KRW, and the company is confident in achieving annual sales of 3.6016 trillion KRW this year, a 20% increase from the previous year. In fact, the company initially projected 10-15% growth in sales guidance in January, raised it to 15-20% in April, and further increased it to 20% on the 4th of this month. Considering that cumulative sales in the first half of this year were 1.5817 trillion KRW, the company successfully passed the first hurdle by achieving sales exceeding 1 trillion KRW in both the third and fourth quarters. Cumulative operating profit also grew 14% compared to the same period last year, reaching 763.7 billion KRW.

On a standalone basis, Samsung Biologics recorded sales of 882.7 billion KRW in the third quarter, a 31% increase compared to the same period last year. Operating profit also grew 23% to 381.6 billion KRW. The company explained that the strong increase in sales and operating profit, resulting in a quarterly operating margin of 43.2%, was due to a solid order volume based on long-term large-scale Contract Manufacturing Organization (CMO) contracts, operational efficiency improvements in Plants 1 to 3, and the revenue contribution from Plant 4, which began full operation in June.

John Rim, CEO of Samsung Biologics, is speaking at a press conference held in Boston, Massachusetts, USA.
[Photo by Lee Chun-hee]

Samsung Biologics' growth is particularly notable as it stands out alone amid the contraction of the global CDMO industry. Recently, due to the global economic slowdown and the end of the COVID-19 pandemic, research and development (R&D) activities of bio-venture companies, which are the upstream industry, have contracted, leading to a decrease in early-stage CDMO projects. Additionally, with the transition to an endemic phase, vaccine production has declined, causing most major global CDMO companies to reduce their guidance.

However, Samsung Biologics is completely unaffected by these risks. The company’s main order strategy is to secure 14 out of the global top 20 big pharma companies as clients and focus on large-scale CMO of commercial-stage pharmaceuticals centered on these clients. This year, Samsung Biologics succeeded in securing large-scale long-term CMO contracts lasting 6 to 7 years with big pharma companies such as Pfizer and Novartis, surpassing annual orders of 2.726 trillion KRW and setting a record for the highest annual order volume.

Kiwoom Securities analyst Heo Hyemin stated, "Although Samsung Biologics has biotech clients, its main customers are big pharma companies, so the impact of funding difficulties faced by early-stage cell and gene therapy developers is minimal." He added, "The increasing outsourcing demand for biological products production from big pharma clients is also a positive factor." Furthermore, vaccine production is limited to Moderna’s COVID-19 messenger RNA (mRNA) drug product (DP) production and Greenlight Biosciences’ mRNA vaccine candidate drug substance (DS) production, allowing stable growth without a base effect.

Continuous Growth Pursued Through Production Capacity and Platform Expansion... Epis Also Actively Developing Biosimilars

Samsung Biologics is not stopping there and is continuously expanding its production capacity. The construction of Plant 5, which began in April, is scheduled for completion in April 2025. With an additional production capacity of 180,000 liters from Plant 5, Samsung Biologics’ total production capacity is expected to reach 784,000 liters, maintaining its position as the global leader in production capacity. The company also revealed plans to increase production capacity to 1,324,000 liters by 2032 through the construction of Plants 6 to 8, each with the same capacity as Plant 5.

Platform expansion is also ongoing. The company is actively investing in antibody-drug conjugates (ADC), one of the most notable modalities (therapeutic approaches) globally. Samsung Biologics is pushing forward with the construction of a dedicated ADC drug production facility, aiming to start commercial production next year. Additionally, through the Samsung Life Science Fund, established jointly with Samsung C&T Corporation, the company has invested in domestic company AimedBio and Swiss-based Araris Biotech, both of which possess next-generation ADC technologies.

Samsung Biologics' 5th plant construction site (left) and aerial view of the ADC production facility
[Photo provided by Samsung Biologics]

Samsung Biologics’ subsidiary, Samsung Bioepis, which was incorporated last year, recorded sales of 262.1 billion KRW and an operating profit of 49.2 billion KRW in the third quarter. Sales decreased by 3% and operating profit by 37% compared to the same period last year. The company explained that this was due to "a temporary base effect from milestone payments related to U.S. product approvals in the third quarter of last year," but emphasized that "despite intensified competition in the global biosimilar market, quarterly performance continues to increase through expanded sales of existing products and new product launches." Currently, Samsung Bioepis has developed a total of 10 biosimilar products, and biosimilars of blockbuster drugs such as Aylia (SB15), Prolia (SB16), and Stelara (SB17) have recently demonstrated equivalence to the original drugs through research data presentations at related academic conferences.

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