UPDATED: Samsung will make some Roche biologics

Roche ($RHHBY), the leader in biologic drugs, this month laid out a blueprint for a 5-year buildout of its biologics manufacturing network. But even after nearly $900 million in investments and the addition of 500 jobs, the Swiss drugmaker will turn for some products to Samsung BioLogics, a company that has worked on a knockoff of at least one of Roche's drugs.

The South Korean company, which has pledged $2 billion in investments to become an expert in biologics manufacturing, said Wednesday it and Roche had clinched a "long-term strategic manufacturing agreement." Samsung will manufacture an undisclosed number of Roche's cell-based products at its two manufacturing facilities in Incheon, South Korea.

Roche said this month that it will invest $208.9 million in a new antibody-drug conjugate (ADC) production facility in its home base of Basel, Switzerland. It will also invest another $285.9 million to expand biologic manufacturing capacity at its facilities in Vacaville and Oceanside in California, and $384.9 million on beefing up its operations in Penzberg, Germany.

In an emailed response, Roche spokeswoman Nadine Pinell said that with growing demand for Roche's approved biologic drugs and more than 65 additional biologics in its pipeline, it needed to boost both its own capacity as well as working with "select targeted reliable external manufacturing organizations." She said Roche picked Samsung for its "expertise and advanced manufacturing capabilities."  

In July, Samsung completed a 740,000-square-foot facility plant in Songdo Incheon. Samsung spokesperson Changsik Park said in an email that the $300 million facility has 6 5,000-liter stainless mammalian cell culture bioreactors. It has the capacity to produce up to 1,300 pounds (600 kilograms) of biopharmaceutical products a year. The second facility, in which Samsung is investing $700 million, will have 10 150-kiloliter bioreactors. It is expected to be complete in 2015 and online in 2016, Park said. 

Although the high-tech manufacturer only stepped into the biologics business in 2011, a Samsung exec boasted last year that the company could make biosimilars at half the cost of what Western drugmakers would have to charge. "It is in Samsung's DNA to produce products at low prices while meeting legal and industry requirements," Tae-Han Kim, president and CEO of Samsung BioLogics, said. The company has put together a roster of big clients, including Bristol-Myers Squibb ($BMY), Merck ($MRK) and Biogen Idec ($BIIB).

But it has not all been easy going for Samsung. Media reports from Korea a year ago said that Samsung had run into problems with one of the biosimilars it was working on and would have to delay production. The product it was tripped up by reportedly was Roche's megablockbuster Rituxan.

- here's the Samsung release