Samsung Biologics toasts banner year despite biotech slowdown
Published: 10 Jan. 2024, 18:14
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- SHIN HA-NEE
- shin.hanee@joongang.co.kr
![Samsung Biologics CEO John Rim speaks during the annual 42nd J.P. Morgan Healthcare Conference at the main Grand Ballroom in the Westin St. Francis Hotel in San Francisco, California. [SAMSUNG BIOLOGICS]](https://koreajoongangdaily.joins.com/data/photo/2024/01/10/5494468f-77db-44f4-8704-ee7a0e16d292.jpg)
Samsung Biologics CEO John Rim speaks during the annual 42nd J.P. Morgan Healthcare Conference at the main Grand Ballroom in the Westin St. Francis Hotel in San Francisco, California. [SAMSUNG BIOLOGICS]
SAN FRANCISCO — After a record breaking 2023, Samsung Biologics expects both horizontal and vertical growth to continue into this year with upped capacity and expanded modalities.
John Rim, CEO of Samsung Biologics, the world’s largest contract development and manufacturing organization (CDMO) in production capacity, predicted that market demand will stay strong, addressing overcapacity concerns over Samsung’s aggressive capacity expansions in recent years.
“I think there’s generally a concern in the market about ‘is there an oversupply?,’ and ‘Is that going to create a pricing competition?’,” said Rim on Tuesday during the ongoing J.P. Morgan Healthcare Conference.
“What I would say is that the market’s very robust, it’s still growing very well,” the CEO said, adding that the capacity supply is “getting absorbed.”
The comments were made during Samsung Biologics’ presentation at the main Grand Ballroom in the Westin St. Francis Hotel in downtown San Francisco, California.
Rim cited expanding indications for drugs, the aging population, new innovative drugs — for Alzheimer’s disease, obesity and more — as well as incoming biosimilars for the growing volumes of CDMO orders.
“From my perspective, the trend for pharma to outsource will continue as they look at […] how to manage the supply chain in a better way and minimize risk,” said the CEO.
With Samsung’s backlog reaching potentially up to $18 billion — or $12 billion at minimum — Rim expressed solid optimism in keeping its plants up and running.
Samsung’s massive fourth plant of 240,000 liters of production capacity, which became fully operational in June last year, “is almost full,” he said, which “triggered our rapid expansion of P5 [fifth plant].”
Samsung Biologics is currently building its fifth plant with a 180,000-liter capacity, slated for completion by April 2025. When the fifth plant is operational, Samsung’s total manufacturing capacity will rise to 784,000 liters.
![Samsung Biologics CEO John Rim speaks during the annual 42nd J.P. Morgan Healthcare Conference at the main Grand Ballroom in the Westin St. Francis Hotel in San Francisco, California. [SAMSUNG BIOLOGICS]](https://koreajoongangdaily.joins.com/data/photo/2024/01/10/39397b35-f8ee-47e9-b9f8-6564193c18ae.jpg)
Samsung Biologics CEO John Rim speaks during the annual 42nd J.P. Morgan Healthcare Conference at the main Grand Ballroom in the Westin St. Francis Hotel in San Francisco, California. [SAMSUNG BIOLOGICS]
While the sector-wide biotech downturn heavily weighed down on its peers through 2023, Samsung Biologics made strides with a series of major wins last year.
Samsung bagged orders worth a record 3.49 trillion won ($2.64 billion) in total through 2023 from pharma giants including Pfizer, Eli Lily, Novartis and Bristol-Myers Squibb, nearly twice the amount of the previous year.
Riding on the winning streak, Samsung Biologics upped its revenue growth forecast for 2023 twice. The growth projection was revised first in April from up to 15 percent to a maximum of 20 percent, and subsequently in October to surpass 20 percent. WuXi Biologics and Lonza shares plunged in the market after the CDMOs warned of a profitability shortfall for 2023.
Rim cited Samsung’s strong talents, as well as its growing market share for the robust performance last year.
The CEO also said during the presentation that the company is “building an ADC [antibody-drug conjugates] facility that will be coming online at the end of this year,” and mentioned that it plans to expand into cell and gene therapies as well.
Samsung Biologics is expected to post an all-time high operating profit of 1.07 trillion won in 2023, according to an analyst forecast compiled by market tracker FnGuide.
“Despite the contract manufacturing organization market slowdown, Samsung Biologics continued to clinch major deals with big pharma companies,” Daol Investment & Securities said in a report issued on Monday, predicting its performance to stay strong through 2024.
J.P. Morgan Healthcare Conference is an annual investment symposium held in San Francisco, California, which is one of the most influential get-togethers of the global life science industry.
Samsung Biologics attended the annual conference for the eighth consecutive year.
BY SHIN HA-NEE [shin.hanee@joongang.co.kr]
with the Korea JoongAng Daily
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