[NEWS IN FOCUS] Samsung Biologics expands contract development business

Industry

Published: 12 Sep. 2021, 18:00

[NEWS IN FOCUS] Samsung Biologics expands contract development business

Samsung Biologics researchers conduct tests in its first overseas research & development center in San Francisco. [SAMSUNG BIOLOGICS]

Samsung Biologics, Korea's largest contract manufacturer organization (CMO) of biopharmaceuticals, is gearing up to expand its footprint in the global contract development and manufacturing organization (CDMO) market.

In late August, Samsung Group rolled out a massive investment plan in its bio sectors, including building two more CDMO plants and developing next-generation biopharmaceuticals like vaccines, cell, and gene treatment. It aims to make Samsung Biologics, which is currently contracted to manufacture the Moderna Covid-19 vaccine, the world's No. 1 CDMO company with a 30 percent market share by 2023.

Samsung Biologics already owns three CDMO factories in Songdo, Incheon. It is already constructing a fourth plant, which will have an annual capacity of 256,000 liters (67,628 gallons). It is the highest capacity for a single bio production plant in the world, according to Samsung.

The plant, which is scheduled to be completed in 2023, will bring Samsung Biologics’ annual production capacity to 620,000 liters, which the company says is equivalent to nearly 30 percent of the global contract manufacturing market for bio pharmaceuticals. Germany's Boehringer Ingelheim is the second largest, with 300,000 liters of capacity, while Switzerland-based Lonza is third with about 260,000 liters per year.

"We will constantly make aggressive investments mostly for Samsung Biologics and Samsung Bioepis [a biosimilar company], such as the construction of fifth and sixth CDMO plants," Samsung said.

Samsung Biologics' third plant in Songdo, Incheon. [SAMSUNG BIOLOGICS]

On June 21, the biotech arm of Samsung Group won a patent invalidation trial against Lonza in China regarding the Switzerland biotech company’s cell line development patents. Samsung filed the lawsuit in January, claiming that Lonza’s patents related to cell line development lack novelty as they are already being used worldwide, and thus are not worthy of protection.

The company had already won a similar lawsuit invaliding Lonza’s patents in Korea in 2019.

Winning the lawsuit will likely remove the hurdles Samsung faces in China, allowing it to expand its development portfolio in the massive bio market.

CDMOs, alongside their clients, develop cell lines and manufacturing processes and produce drug candidates for early phase clinical trials.

Compared to CMOs, which mass-produce drugs for large-scale Phase 3 clinical trials or market releases based on the client’s recipe, CDMOs are involved in the process a lot earlier, before market commercialization, and therefore increase the necessity of physical proximity to clients.

The development business is favored by smaller bio start-ups that have the technology but don’t have the experience or capacity to develop bio pharmaceuticals, which typically are long-term projects with a low possibility of success.

Samsung Biologics launched its development unit in 2018, and has been working to expand the business since then. It opened its first overseas research & development center in San Francisco in October — the hub of the bio industry where about 350 global biotech companies are based.

In August 2020, the company introduced its own-developed cell line technology S-CHOice, the first Korean biotech company to do so. A cell line is a population of cells that can be maintained in a culture for an extended period of time, retaining the stability of certain phenotypes and functions. It is crucial in achieving the mass production of a biopharmaceutical drug.

The S-CHOice cell line stands out for having a high productivity and showing improved cell viability with over 90 percent, which demonstrates its effectiveness in producing high quality cell lines, Samsung Biologics said. With the technology, the company can develop a cell line in only three months.

“Samsung Biologics’ S-CHOice cell line technology allows companies to make drugs more stably and quickly compared to competitors,” said a spokesperson for the company.

Samsung Biologics claims it can complete the entire process from cell line development to final production in seven months, which is nearly half the 12 months offered by global leaders in the field.

The bio company has inked a total of 81 development deals as of the end of June, worth about $7 billion. In 2020 alone, it won $2.1 billion worth of deals — about 35 percent of the total. Of them, three drugs have received nods to undergo clinical trials from the U.S. Food and Drug Administration and one from the European Medicines Agency.

Earlier in 2020, GI Innovation’s GI-101 drug candidate, which Samsung had worked on since cell line development, was licensed to Chinese pharmaceutical firm Simcere for a potential 900 billion won ($770 million) in milestone payments and double-digit royalties based on the drug's future sales.

In November, Samsung Biologics signed a development deal with GeneQuantum, a Chinese biotech venture. The two joined forces to develop GQ1003 — an antibody-drug conjugate (ADC) to treat specific types of lung cancer, breast cancer and other solid tumors. ADC is a class of biological treatments that attaches anticancer drugs to an antibody that targets cells inside the body.

The deal with GeneQuantum is meaningful for Samsung, as it was the company's first CDO client from China.

“Samsung Biologics' CDO business has two big advantages, competitive pricing and excellent quality with outstanding capability,” said Kim Jung-hyun, an analyst at Kyobo Securities. “The company has been making a successful track record in the global development business."

Samsung Biologics reported a record year in 2020, with annual revenue breaking 1 trillion won for the first time in the nine years since the firm was established in 2011. It reported 241 billion won in net profit in 2020, up 18.8 percent on year. Its second quarter net profit jumped 133.6 percent to 121.5 billion won, overshooting the market consensus compiled by FnGuide.

BY SARAH CHEA [chea.sarah@joongang.co.kr]