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Samsung Biologics influencing presence in group portfolio

A Samsung Biologics researcher looks into a bioreactor at the company's plant in Incheon in this undated file photo. Courtesy of Samsung Biologics
A Samsung Biologics researcher looks into a bioreactor at the company's plant in Incheon in this undated file photo. Courtesy of Samsung Biologics

By Nam Hyun-woo

Samsung Biologics CEO Kim Tae-han
Samsung Biologics CEO Kim Tae-han
Samsung Biologics is exerting its influence in Samsung thanks to the steady lucrative agreements with the industry's major drug manufacturers.

As the contract development and manufacturing organization stands out among Samsung's affiliates, Samsung Biologics is helping the group diversify its business portfolio beyond semiconductors and batteries.

On Friday, Samsung Biologics said it has entered into a contract manufacturing deal with GlaxoSmithKline (GSK) on supplying additional manufacturing capacity for GSK's biopharmaceutical therapies.

Under the agreement they signed, the Samsung affiliate will provide GSK with an extra capacity for "large-scale biopharmaceutical product manufacturing." The two companies stressed the capacity amount would be flexible and subject to GSK's requests.

The deal is worth more than $231 million over the next eight years, and it will initially cover commercial production of GSK's Benlysta, whose technology transfer will start this year and commercial supply is expected in 2022.

"We are very proud and excited to announce this long-term agreement with GSK," Samsung Biologics CEO Kim Tae-han said in a statement. "Samsung Biologics entered the biopharma industry with the goal to help our clients bring valuable biological medicines to patients faster. We are thrilled to partner with GSK, a company that shares our vision."

The latest announcement came on the same day after the Samsung affiliate separately signed a contract manufacturing deal with a U.S.-based pharmaceutical company. Samsung did not reveal the specific name of the product or company, but disclosed that the deal is worth $150 million and the value can go up to $222 depending on the terms of the finalized contract.

The combined value of the two deals, $381 million or 470.7 billion won, accounts for approximately 67 percent of Samsung Biologics' sales last year of 701.6 billion won. Samsung Biologics' 2019 sales and operating profit expanded by 31 percent and 64.7 percent, respectively, year-on-year.

Samsung has Samsung Electronics, Samsung Display and Samsung SDI as its core affiliates both in terms of the units' contributions in overall group profits and global market share. Biologics is moving on the biopharmaceutical-related industry and the move will provide a solid justification for the group's top management over pending issues and questions relating to the group's future sustainability.

Samsung Electronics plans to construct its new advanced extreme ultraviolet (EUV) line in Pyeongtaek, Gyeonggi Province, in efforts to expand the production capacity of its foundry business currently dominated by Taiwan's TSMC. Samsung is the longtime leader in memory chips, but it has a long way to go in logic chips.

On a related note, Samsung leader Lee Jae-yong, who officially holds the vice chairman title at Samsung Electronics, met with Hyundai Motor Group Executive Vice Chairman Chung Euisun and discussed advanced rechargeable batteries for electric vehicles (EVs).

The meeting garnered keen attention as it was the first business meeting between the chiefs of Korea's top two conglomerates and they selected EV batteries as the subject for their potential cooperation.

Battery unit Samsung SDI has been boosting its market share recently. According to market tracker SNE Research, Samsung SDI logged a 6 percent global market share in the first quarter of this year to stand as the world's fourth-largest EV battery maker.

China is also casting a similar outlook on Samsung group's future portfolio. During a meeting with Lee on May 19, Hu Heping, Communist Party Secretary of Shaanxi province, told the Samsung leader he was hoping to expand the province's partnership with Samsung in semiconductors, batteries and biopharmaceuticals.



A Samsung Biologics researcher looks into a bioreactor at the company's plant in Incheon in this undated file photo. Courtesy of Samsung Biologics
A Samsung Biologics researcher looks into a bioreactor at the company's plant in Incheon in this undated file photo. Courtesy of Samsung Biologics

By Nam Hyun-woo

Samsung Biologics CEO Kim Tae-han
Samsung Biologics CEO Kim Tae-han
Samsung Biologics is exerting its influence in Samsung thanks to the steady lucrative agreements with the industry's major drug manufacturers.

As the contract development and manufacturing organization stands out among Samsung's affiliates, Samsung Biologics is helping the group diversify its business portfolio beyond semiconductors and batteries.

On Friday, Samsung Biologics said it has entered into a contract manufacturing deal with GlaxoSmithKline (GSK) on supplying additional manufacturing capacity for GSK's biopharmaceutical therapies.

Under the agreement they signed, the Samsung affiliate will provide GSK with an extra capacity for "large-scale biopharmaceutical product manufacturing." The two companies stressed the capacity amount would be flexible and subject to GSK's requests.

The deal is worth more than $231 million over the next eight years, and it will initially cover commercial production of GSK's Benlysta, whose technology transfer will start this year and commercial supply is expected in 2022.

"We are very proud and excited to announce this long-term agreement with GSK," Samsung Biologics CEO Kim Tae-han said in a statement. "Samsung Biologics entered the biopharma industry with the goal to help our clients bring valuable biological medicines to patients faster. We are thrilled to partner with GSK, a company that shares our vision."

The latest announcement came on the same day after the Samsung affiliate separately signed a contract manufacturing deal with a U.S.-based pharmaceutical company. Samsung did not reveal the specific name of the product or company, but disclosed that the deal is worth $150 million and the value can go up to $222 depending on the terms of the finalized contract.

The combined value of the two deals, $381 million or 470.7 billion won, accounts for approximately 67 percent of Samsung Biologics' sales last year of 701.6 billion won. Samsung Biologics' 2019 sales and operating profit expanded by 31 percent and 64.7 percent, respectively, year-on-year.

Samsung has Samsung Electronics, Samsung Display and Samsung SDI as its core affiliates both in terms of the units' contributions in overall group profits and global market share. Biologics is moving on the biopharmaceutical-related industry and the move will provide a solid justification for the group's top management over pending issues and questions relating to the group's future sustainability.

Samsung Electronics plans to construct its new advanced extreme ultraviolet (EUV) line in Pyeongtaek, Gyeonggi Province, in efforts to expand the production capacity of its foundry business currently dominated by Taiwan's TSMC. Samsung is the longtime leader in memory chips, but it has a long way to go in logic chips.

On a related note, Samsung leader Lee Jae-yong, who officially holds the vice chairman title at Samsung Electronics, met with Hyundai Motor Group Executive Vice Chairman Chung Euisun and discussed advanced rechargeable batteries for electric vehicles (EVs).

The meeting garnered keen attention as it was the first business meeting between the chiefs of Korea's top two conglomerates and they selected EV batteries as the subject for their potential cooperation.

Battery unit Samsung SDI has been boosting its market share recently. According to market tracker SNE Research, Samsung SDI logged a 6 percent global market share in the first quarter of this year to stand as the world's fourth-largest EV battery maker.

China is also casting a similar outlook on Samsung group's future portfolio. During a meeting with Lee on May 19, Hu Heping, Communist Party Secretary of Shaanxi province, told the Samsung leader he was hoping to expand the province's partnership with Samsung in semiconductors, batteries and biopharmaceuticals.



Nam Hyun-woo namhw@koreatimes.co.kr

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