Samsung Biologics (207940) has signed a long-term contract manufacturing organization (CMO) agreement worth 350.8 billion won ($262.18 million) with a pharmaceutical company based in Europe.
The deal secures a stable order backlog through a long-term commitment at a time when competition in the global contract development and manufacturing organization (CDMO) market is intensifying.
Samsung Biologics said in a regulatory filing on the 10th that it had signed the biopharmaceutical contract manufacturing agreement, valued at about 350.8 billion won ($262.182 million), with the European drugmaker. The client and the product name were not disclosed under confidentiality provisions. The contract runs through December 31, 2033.
The agreement lifts Samsung Biologics' cumulative orders since its founding to $21.9 billion. It is the company's sixth new contract disclosed this year. The company said securing long-term contracts strengthens its medium- to long-term revenue base even as global economic uncertainty and intensifying competition in the CDMO market make the business environment challenging.
Samsung Biologics has partnerships with numerous global pharmaceutical companies, including most of the world's top 20 drugmakers. Based on a cooperation framework spanning the entire process from drug development to commercial production, the company is winning new clients while expanding contracts with existing ones.
Capacity expansion is also underpinning its competitiveness in winning orders. Samsung Biologics began operating its fifth plant, with 180,000 liters of capacity, in April last year, and acquired a plant in Rockville, U.S., in March this year. The Rockville facility has capacity of 60,000 liters, bringing the company's total capacity to 845,000 liters. Once plants six through eight, now under construction at the second bio campus in Songdo, come online in stages, total capacity will rise to 1.385 million liters.
The company is also broadening its business portfolio. In addition to antibody drugs and messenger RNA (mRNA) products, its existing mainstays, it is building a dedicated facility for antibody-drug conjugates (ADCs). In July, it announced a plan to acquire Polypeptide Group, outlining a strategy to expand into peptide CDMO services.
Samsung Biologics is expanding its global sales network as well. The company plans to open a European sales office in the Netherlands within the third quarter of this year. After the U.S. and Japan, the addition of Europe will give it sales bases in the major biopharmaceutical markets, widening contact with local clients.
Quality is cited as another foundation for order growth. Samsung Biologics recorded a 99% batch success rate last year and had secured a cumulative 464 approvals from global regulators as of September this year.
An official at Samsung Biologics said the company will "respond to rising demand for biopharmaceuticals and diversification of supply chains through capacity expansion, business portfolio diversification and an expanded global sales network, while continuing to attract new clients and expand contracts with existing ones."
