CDMO Samsung Bio Secures Record $1.24 Billion Biopharma Manufacturing Contract, Raising Total 2024 Deal Value to Over $3.3 Billion

Samsung Biologics has secured a record $1.24 billion manufacturing contract, which will support the production of biopharmaceuticals at Samsung’s Incheon facility until December 2037. The CDMO continues to expand its capacity and partnerships, notably increasing its collaborations with top pharmaceutical companies. Meanwhile, the global Biologics CDMO market is projected to grow from $21.09 billion in 2023 to $68.97 billion by 2031, driven by rising demand for complex biologics and monoclonal antibodies. North America leads this market, with significant expansion opportunities emerging in the Asia-Pacific region.

Major Asian Pharma Giant Brings Yearly Contract Value to 3.3B

With multiple high-profile production agreements already in place for 2024, Contract Development and Manufacturing Organization (CDMO) Samsung Biologics (KRX: 207940.KS) has secured another significant contract. The company has entered into a manufacturing partnership valued at $1.24 billion with a major Asia-based pharmaceutical giant, expected to run through December 2037. This deal marks the largest contract signed by a single client in Samsung Biologics’ history.

The production of the client’s biopharmaceuticals will take place at Samsung’s biomanufacturing site in the Songdo area of Incheon, South Korea, bringing the total new contract value for the year to more than $3.3 billion, as stated in a release on Tuesday. Samsung did not disclose the identity of its new partner or the specific drugs involved in the production under this agreement. Notably, with this partnership, Samsung now reports collaborations with 17 of the world’s top 20 pharmaceutical companies, up from 16 when the company reported its second-quarter earnings in late July.

The CDMO plans to complete the buildout of a dedicated antibody-drug conjugate (ADC) facility by year-end. This facility will become operational in April 2025. It will add 180 kiloliters of capacity, increasing the total to 784 kL across Samsung’s Plants 1 through 5 in South Korea. Samsung aims to expand its customer base in key regions, especially in Asia-Pacific, focusing on Japan. To strengthen relationships with current and prospective clients, the company will open a regional office in Tokyo.

Samsung Biologics: Securing a Series of Game-Changing Production Contracts in 2024

This new contract is part of a series of major production agreements Samsung Biologics has inked this year. Earlier this summer, the CDMO announced a new deal worth 1.46 trillion Korean won (approximately $1.05 billion) with an unnamed U.S. drugmaker. This deal represented over 39% of Samsung Biologics’ total sales for 2023, which reached around 3.7 trillion won (roughly $2.7 billion). In March, Samsung expanded a long-standing partnership with Belgium’s UCB through a new drug substance manufacturing deal valued at about $288 million. Additionally, an existing partnership with Baxter Healthcare was updated in June, with Baxter agreeing to pay Samsung upwards of $233 million for its manufacturing services through the end of 2034, an increase from the previously agreed amount of $15 million.

Amid these contracts, Samsung Biologics’ sales have steadily increased throughout the year. In the second quarter, the company reported revenue of 1.16 trillion won ($842 million), reflecting a nearly 34% year-over-year increase. President and CEO of Samsung Biologics, John Rim, commented, “We are pleased to strategically collaborate with the Asia-based pharmaceutical company to bring effective, high-quality biopharmaceuticals to the global market. The deal comes at a significant time as we proactively build on our biomanufacturing capacity to readily support our clients. Leveraging our capabilities and proven expertise, we plan to maintain momentum for further expansion by fostering trusted and sustainable partnerships with potential and existing clients for mutual growth, and ultimately help patients with unmet needs.”

Competitive Landscape of the Biologics CDMO Market

The global Biologics CDMO market values at USD 21.09 billion in 2023. It projects to reach USD 68.97 billion by 2031, growing at a CAGR of 16.18%, according to InsightAce Analytic. Key players driving this market include Boehringer Ingelheim, Lonza, Samsung Biologics, Novartis, Toyobo, Parexel International, Catalent, Binex, AGC Biologics, AbbVie Contract Manufacturing, JRS Pharma, Fujifilm Diosynth Biotechnologies, and Wuxi Biologics. These organizations provide specialized services that support biopharmaceutical companies from early drug discovery through commercial manufacturing.

Furthermore, mammalian cell-based processes significantly contribute to the Biologics CDMO market. This segment proves crucial for producing complex biopharmaceuticals, particularly monoclonal antibodies. Notably, these antibodies treat cancer, autoimmune disorders, and infectious diseases. As demand for such therapies grows, CDMOs focusing on mammalian processes position themselves for expansion.

In addition, North America dominates the Biologics CDMO market due to the United States and Canada. The region features a robust pharmaceutical sector and leads in clinical trial activity. Conversely, the Asia-Pacific biopharmaceutical sector expands rapidly, driven by rising healthcare costs and increasing chronic disease prevalence. This growth presents ample opportunities for Biologics CDMOs to enhance drug development and manufacturing capabilities.

Author

Bernice Lottering