South Korea's Samsung BioLogics has pledged to be a big deal in biosimilars, but so far its biologics subsidiary has produced mostly operating losses for its parent. In anticipation of turning that around, the company will undertake a significant expansion of the biologics plant in Songdo, Incheon, that it opened in 2013.
The division of Samsung Group will invest about $700 million in an expansion of the facility, the Korea Herald reports. The project is slated to be completed in 2016 and by 2017 is expected to boost its annual capacity to 180,000 liters, placing it third behind Swiss contract manufacturer Lonza and Germany's Boehringer Ingelheim, the newspaper says.
Samsung already does biologics manufacturing for Big Pharma players like Bristol-Myers Squibb ($BMY), Roche ($RHHBY) and Merck ($MRK). But in 2012, it announced a joint venture with U.S.-based Biogen Idec ($BIIB) to create Samsung Bioepis, which would develop, manufacture and market biosimilars. The venture, which the Herald says is 93% owned by Samsung, is working on 7 biosimilars.
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| Biogen Idec CEO George Scangos |
When the deal was announced, Biogen CEO George Scangos said that he saw value in relying on another company for the manufacturing to lower manufacturing costs. Tae-Han Kim, president of Samsung BioLogics, has said that the company's manufacturing expertise should allow it to produce biosimilars at half the cost of the reference products.
Samsung Group is looking to its biologics subsidiary to provide its next boost of growth, but so far, the Herald reports, Samsung BioLogics has been unable to generate any profits. It says the unit last year had an operating loss of 146.3 billion won ($132.3 million), up 10 times from 12.2 billion won loss in 2011.
- read the Korea Herald story