Samsung has already spent billions of dollars in short order to establish one of the largest biologics manufacturing operations in the world. On Wednesday, it said it will spend billions more.
While short on details, the South Korean conglomerate announced plans to invest $22 billion across business lines in the next few years that it said will propel its growth in the future, including biopharmaceuticals, along with artificial intelligence and auto electronics.
"For biopharmaceuticals, Samsung has seen strong growth from both its contract manufacturing and biosimilar businesses. It will continue to invest heavily in the businesses, including developing and manufacturing biosimilars to combat chronic and difficult-to-cure diseases.”
Its Samsung BioLogics unit established its CDMO and biosimilars business quickly after Samsung decided it was a viable extension of its chemicals business. It has pledged to become the top biologics contract manufacturer in the world and is in the process of completing a third biologics plant at a site in Incheon next to two others—a feat accomplished in seven years.
With completion of the third facility, the company will have total capacity of 362,000 liters and will have invested 3 trillion won ($2.6 billion), in the massive buildup.
The unit has attracted top tier pharma and biotech business but has yet to make a profit. Last month it reported earnings that included a net loss of 9.6 billion won ($8.53 million) in the second quarter. It said the operating profit of Samsung BioLogics increased sharply by 13.7 billion won ($1.2 million) from the previous quarter and that it showed an improvement in its net loss as sales improved from its Samsung Bioepis subsidiary, a joint venture with Biogen to produce biosimilars.
Earlier accounting at the JV, however, has been called into question by Korean regulators. Last month, South Korea's Securities and Futures Commission found that Samsung BioLogics "violated accounting standards by intentionally omitting information regarding the joint venture agreement with Biogen in its public disclosure." It said it had referred its finding to prosecutors. Samsung has denied the allegations, saying it complied with all accounting standards.
The disclosures came even as Biogen paid about $700 million to increase its share in the JV to 49.9% from 5.4%. Biogen CEO Michel Vounatsos said in the company’s first-quarter earnings call that the biotech decided to up its stake because of the JV's success. He said the joint venture's European biosimilar revenue is tracking at about $500 million per year.
Samsung also hit a milestone last month with the FDA approval of its first finished product, a monoclonal antibody, at the second of the three plants. Samsung did not identify the product or the client. The plant is already approved by the FDA to make drug substances, and Europe has approved the facility to produce two finished products.