Samsung Biologics, a leading contract development and manufacturing organization (CDMO), recently announced that its plans to begin partial operations at its Plant 4 facility in Songdo, South Korea, are moving ahead of schedule. Partial operations of 6 X 10,000L will commence in October 2022, with Samsung Biologics already actively securing presales for the facility. And when Plant 4 is ready for full operations in mid-2023, it will hold 256,000 liters of capacity, making it the largest single contract biomanufacturing facility in the world. This added capacity is expected to bring Samsung Biologics’ total capacity at its Songdo facilities to 620,000 liters, the largest capacity of any CDMO in a single location.
Expansion Fueled by Revenue Growth
Samsung Biologics announced its plans to accelerate the implementation of partial operations at Plant 4 in its earnings report for the first quarter of 2022. The CDMO achieved record growth for the quarter, with its revenue of 511.3 billion Korean won (KRW) up 96% year over year (YoY), a 137% YoY increase in operating profit, and a 141% YoY increase in net profit.
“Samsung Biologics’ strong start to the 2022 fiscal year was driven by building momentum around our long-term growth strategy and expanding capacity,” said Samsung Biologics CEO John Rim in a statement on the earnings report. “Our first-quarter financial performance demonstrates a significant and sustained level of customer demand in our services and capabilities.”
The record growth for first-quarter 2022 comes on the heels of a successful 2021, with the CDMO providing fill/finish services for Moderna’s COVID-19 mRNA vaccine production and reporting revenue increases of 35% for the year.
Samsung Biologics is using this revenue growth to continue to fuel expansion, in both its facilities and its portfolio. Plant 4 is its largest facilities-expansion project, but the CDMO is also constructing a second Bio Campus in Songdo, and also added a new mRNA vaccine drug substance manufacturing suite recently.
Sustainable CDMO Development
As Samsung Biologics expands its capacity, it maintains a focus on the sustainability of its operations.
“Turning to the present and future, Samsung Biologics has also committed to making sustainability a key component of the way we work and engage with our partners and communities,” said Rim in his comments on the earnings report. “In our mission to build a healthier future for all, while creating enduring and sustainable value, we are investing in initiatives to mitigate the risks of climate change in the greater areas we impact.”
For example, Samsung Biologics has joined the Sustainable Markets Initiative, which outlines a plan to harness private sector innovation to transition to sustainable markets by 2030. The CDMO has also committed to thorough environmental-impact monitoring and reporting at its plants through its involvement with the nonprofit Carbon Disclosure Project (CDP) and the Financial Stability Board’s Task Force on Climate-Related Financial Disclosures (TCFD).
In 2021, the CDP recognized Samsung Biologics with an Honor Award in the pharmaceutical sector for its decarbonization efforts and eco-friendly management systems.
In a March 2022 letter to shareholders, Rim emphasized Samsung Biologics’ commitment to sustainability.
“In light of the increasing importance of actions toward environmental, social, and governance (ESG) management, Samsung Biologics issued its first annual sustainability report, consolidating its policies for an enhanced ESG management system and establishing an ESG Committee,” said Rim. “Samsung Biologics also received an ‘A’ ESG rating from the Korea Corporate Governance Services (KCGS) and was added to the Dow Jones Sustainability World Index, a first for a Korean pharmaceutical company. We will further enhance our social contribution activities and initiatives to build a harmonious coexistence of individuals, companies, and the environment.”
A New Biopharma Hub
Samsung Biologics’ expanded capacity at its Songdo headquarters reaffirms the CDMO’s role as a leader in South Korea’s fast-growing biopharmaceuticals industry.
Boosted by government support and the growth of companies like Samsung Biologics, South Korea is quickly becoming a global biopharma hub, creating jobs and catalyzing economic activity in the region.
In a recent interview with The Korea Society, Rim explained the significance of Samsung Biologics’ role in this industry growth.
“The government was very supportive in terms of the Incheon Free Economic Zone (IFEZ) and enabled us to really start the business here [in Songdo]. And over the last several years we’ve grown to be the No. 1 CDMO company, in terms of capacity, in the world,” said Rim.
He explained that the CDMO’s goal is “not only to foster the industry, but also employment. If you look at our company, we’ve gone from less than 100 people to almost 4,000 people. And we anticipate growing to 10,000 within several years.”
In constructing the world’s largest biomanufacturing facility, Samsung Biologics continues to move toward this goal.
The facility could also potentially continue another trend that Rim addressed in The Korea Society interview when he noted: “A lot of our suppliers, just because we now have critical mass, have built warehousing and operations here as well.”
A Pillar of Growth
In his letter to shareholders, Rim outlined three pillars of Samsung Biologics’ growth as the company looks forward in the next decade: increasing its manufacturing capacity, diversifying its portfolio, and expanding its global reach.
With the construction of Plant 4, Samsung Biologics is focusing on its first pillar, increasing manufacturing capacity to industry-leading levels.
Plant 4 looks to be a key component of the company’s plans, as outlined by Rim in the letter: “continuously delivering solid growth in the biologics CDMO business while successfully expanding into new business areas.”
