CDMO Samsung Biologics Signs 2nd Major Deal with GSK, Worth $296 Million

Samsung Biologics, one of the world’s largest contract development and manufacturing organizations (CDMOs), is continuing to build on what has been a productive partnership with the U.K.-based pharmaceutical company GlaxoSmithKline (GSK). In 2020, the CDMO signed a $231 million, eight-year manufacturing agreement with GSK to produce a variety of biologic medicines, including the lupus drug Benlysta. Now, the two companies have announced a second major manufacturing deal, this one worth $296 million.

The deal, which was disclosed in a regulatory filing in October, didn’t list which products Samsung Biologics would manufacture, but it noted that the partnership will extend to 2030. This second partnership with Samsung Biologics signals GSK’s continued push to expand its role in the biopharmaceuticals space.

For Samsung Biologics, the arrangement comes amid the significant expansion of its manufacturing capabilities. The CDMO began partial operations at its fourth plant in October, with full operations scheduled for 2023. The plant is the largest single biomanufacturing facility in the world and will add 240,000 liters of capacity for Samsung Biologics, giving the company a total capacity of 604,000 liters across its facilities in Songdo, South Korea.

One of the largest CDMOs, Samsung Biologics has grown its business by focusing on partnering with companies like GSK to accelerate and scale up the manufacture of biologic medicines.

Expanding CDMO and Biologics Markets

“The demand for biomedicines is forecasted to exceed supply by 2026,” said Kevin Sharp, vice president of global sales at Samsung Biologics, in a recent presentation at CPHI (Convention on Pharmaceutical Ingredients) Worldwide 2022. “As a lot of investment and time are required to mass-produce biomedicines on time, a strategic partnership with an industry-proven CDMO like Samsung Biologics would help global biotech companies to run businesses more efficiently and put more concentrated efforts into developing new, innovative medicines.”

GSK and Samsung Biologics’ newest partnership comes just two years after its initial alliance and the beginning of the companies’ joint involvement with Vir pharmaceuticals’ production of COVID-19 antibodies. 

This flurry of activity indicates the emergence of a productive partnership as the pharmaceutical industry continues to shift toward outsourcing manufacturing to CDMOs amid an expanding market for biologic medicines. 

The market for biologics is expected to grow at a compound annual growth rate of 8.4% between 2021 and 2028, reaching a value of $567.96 billion. At the same time, the CDMO market is forecast to grow at a CAGR of 6.7% from 2021 to 2028. 

In this expanding market, GSK is turning to Samsung Biologics to ramp up its involvement in biopharmaceuticals, while the CDMO continues to expand its capacity to meet increasing demand. 

Focus on Sustainability

As demand for CDMO services increases, the industry has turned its attention to expanding sustainability, focusing on environmental, social, and governance initiatives aimed at reducing emissions across the biopharmaceutical supply chain. 

Both GSK and Samsung Biologics have taken an active role in the Sustainable Markets Initiative, joining a health systems task force that also includes AstraZeneca, Merck KGaA, Novo Nordisk, Roche, and Sanofi. The task force is focused on achieving net-zero emissions in supply chain operations, patient care systems, and clinical trials. 

As the lone CDMO on the task force, Samsung Biologics is particularly intent on sustainable development and manufacturing practices. 

James Choi, executive vice president and chief information and marketing officer at Samsung Biologics, stressed the importance of foregrounding sustainability as he led a session titled “Partnering With CDMOs for a Sustainable Future” at CPHI Worldwide 2022. 

“The biopharmaceutical industry is responsible for about 4% to 5% of global greenhouse gas emissions released into the air, and about half of those emissions come from supply chain operations,” explained Choi. 

Samsung Biologics has emphasized sustainability as a key priority, establishing an ESG committee and joining several initiatives in addition to SMI, including the Carbon Disclosure Project, and the Frontier 1.5D initiative.  

In its most recent ESG report, the CDMO stated that it reduced its direct emissions, known as Scope 1 and 2, by 32.3% in 2021, and it outlined a goal of a 54.3% reduction in these emissions by 2026. Samsung Biologics also committed to a target of a 25.7% reduction of Scope 3 emissions, those that are not directly produced by the company but related to its supply chain, by 2026.

“Under our ‘Driven. For a Sustainable Life.’ framework, we are continuously improving and committing our resources to create a sustainable environment, build a healthy society, and implement responsible business activities,” said Samsung Biologics CEO John Rim in a statement on the ESG report’s release. “Our sustainability initiatives reinforce the connection between the work we do and how we fulfill our mission, while delivering on our core values of always putting people and the environment first.” 

As the pharmaceutical industry increases its focus on sustainability, Samsung Biologics’ commitment to reducing emissions across operations should continue to align it with industry partners such as GSK. 

Next Steps for Samsung Biologics

The GSK accord is another sign of Samsung Biologics’ growth in recent years.

The company released its third quarter earnings report in October, recording a cumulative revenue surpassing KRW 2 trillion (approximately $1.4 billion) for the fiscal year. While new ventures such as an expanded mRNA vaccine production suite and the full acquisition of biosimilars company Samsung Bioepis have contributed to Samsung Biologics’ growth in 2022, its antibody manufacturing partnerships, such as those with GSK, continue to be a bedrock of its business.

“This past quarter saw strong performance and growth due to a consistent momentum in signing new contracts, helping us meet client demand for integrated offerings and deliver long-term value,” said Rim in a statement on the earnings report. “Not only have we delivered on our commitments by commencing GMP operations of Plant 4 within just 23 months from the start of its construction, we have also developed and launched our next-generation bio-technologies – S-DUAL™ and DEVELOPICK™ – which will help streamline and accelerate the antibody development process to save time and cost for our clients.”

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