Biologics CDMO Samsung BioLogics has kept up its frantic growth even as it deals with legal issues tied to its joint venture with Biogen.
The South Korean company on Thursday reported that sales for the year hit KRW 535.8 billion ($482 million), up 15.3%, as it added more work to its second of three manufacturing facilities.
Samsung said its operating profit fell by 15.6%, tied to depreciation costs for its third plant and an increase in sales and administrative expenses. It carefully pointed out that its year-over-year net profit increased by KRW 321.1 billion ($289 million) because of Biogen’s investment last fall of $700 million to build its stake in their bioismilars joint venture to 49.9% from the 5.4% it already owned.
It was Samsung BioLogic’s 2015 accounting for Samsung Bioepis, its Biogen partnership, that generated difficulties with Korea’s Financial Services Commission (FSC). Samsung’s accounting for the deal allowed its finances to swing from a loss to a profit shortly before an initial public offering.
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Samsung has denied any wrongdoing, saying its methods were approved by its outside accounting firms. The FSC imposed a number of penalties and referred its case to prosecutors, but a Korean court recently put those on hold while prosecutors investigate.
Samsung BioLogics established its CDMO and biosimilars business quickly after its parent decided it was a viable extension of its chemicals business. It has pledged to become the top biologics contract manufacturer in the world and has built three biologics manufacturing facilities in Incheon, a feat accomplished in seven years.
With completion of the third facility, the company has total capacity of 362,000 liters and has invested 3 trillion won ($2.6 billion) in the massive buildup. Samsung BioLogics said Thursday it plans to expand utilization of its third manufacturing plant to 50% from 25% by the end of the year.