Samsung reports operating profit, extends collaboration with Merck KGaA

Samsung BioLogics South Korea
Samsung will soon complete a third plant in South Korea, part of a massive, seven-year, $2.6 billion buildup of biologics capacity.

Three years into a manufacturing collaboration, Germany’s Merck KGaA and South Korea’s Samsung BioLogics have decided to deepen their relationship even as Samsung reported an operating profit for the first time. 

The two companies said on Monday that under the reiterated deal, first struck in 2014, Merck will provide process development and some technical training for its Mobius single-use technology which Samsung BioLogics uses, the Korea Times reports.

The announcement comes days after Samsung BioLogics reported third-quarter earnings in which it showed an operating profit for the first time. The company, which has undertaken a massive manufacturing buildup in hopes of becoming a top biologics contractor, expects to complete its third plant before the end of the year, Samsung spokespeople said in a recent interview.

Samsung reported a KRW 20.5 billion operating profit ($18.2 million), on KRW 127.5 billion ($113.4 million) in revenues for the quarter as its first plant runs at full pace and its second facility continues to draw new contracts, the company said.

Its net loss, however, widened to 31.7 billion won ($28.2 million) from 9.6 billion won in the same quarter a year ago, primarily because of “call option valuation losses on its subsidiary company,” it reported.

Its third plant will have a 180,000-liter capacity and be able to manufacture 4,500 kilos of biologics products annually once it becomes fully operational. The 118,618-meter facility is being built at a cost of about $740 million. Commercial production is expected to begin in 2020. Using a design and build process has allowed the company to shorten the build-out time for each successive facility.

Samsung BioLogics has about 1,700 employees, which will increase by another 340 to 500 employees with the addition of the new plant. Samsung said it will have invested 3 trillion won, about $2.6 billion, in the massive buildup and have the world’s largest biologics contract manufacturing capacity at 362,000 liters when the third plant comes into use, something it will have achieved within seven years.