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| Samsung Biologics’ office in Songdo, Incheon / Courtesy of Samsung Biologics |
By Baek Byung-yeul
Samsung Biologics has inked a massive drug manufacturing deal with U.S.-based pharmaceutical giant Gilead Sciences, signaling that it is on the way to improving its mainstream contract manufacturing organization (CMO) business.
On Monday, Samsung Biologics reported the contract to the Financial Supervisory Service that its counterpart in the drug manufacturing contract has been changed to Gilead Sciences, from Immunomedics. The new contract amount has also increased to 300.58 billion won ($270.3 million) from 184.46 billion won.
“The contract was initially signed with Immunomedics, but Gilead Sciences acquired Immunomedics, and our counterpart was changed according to the final notice from the company that completed the acquisition process,” Samsung said. Gilead announced the acquisition of Immunomedics for $21 billion last year.
The size of the contract represents 64.69 percent of Samsung Biologics’ annual sales, and the contract period is until Jan. 31, 2025, the firm added.
The contract with Gilead Sciences can be interpreted as suggesting that the Samsung Group affiliate is on the path to expanding the competitiveness of its mainstream CMO business, while diversifying its business portfolio into vaccine production and contract-based drug development.
With biotechnology firms seeking to expand the manufacturing volume of their COVID-19 vaccines, Samsung Biologics has been highlighted lately for its contract-based vaccine production business, but the company has been on course to improve its shares in the CMO business.
During President Moon Jae-in’s visit to the United States last month, Samsung inked a deal to manufacture Moderna’s COVID-19 vaccine at its plant in Incheon, west of Seoul. Under the agreement, Samsung Biologics will provide large-scale, commercial fill-finish manufacturing for mRNA-1273, Moderna’s COVID-19 vaccine, starting in the third quarter of this year.
The company is the world’s largest drug manufacturer with an annual capacity of 364,000 liters. Based on its competitiveness as a leading drug maker, the company is also seeking to diversify its portfolio into the contract development organization (CDO) business, an end-to-end biopharmaceutical project running drug development procedures from laboratory research to clinical trials.
As these businesses are growing, Samsung Biologics joined the 1-trillion won sales club for the first time last year, logging in 1.16 trillion won. In addition, the total number of CMO contracts was at 56, up by 20 from 2019.
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