Big Pharma MSD Signs $71 Million Contract
8-Year Long-Term Deal... 'The Power of Quality and Production'
Expecting 'Record-Breaking Orders' Following Last Year
Samsung Biologics is accelerating its contract acquisition by leveraging 'quality management' to expand production capacity and maintain a virtuous cycle of long-term orders.
On the 13th, Samsung Biologics announced that it had signed a new contract worth $70.58 million (approximately 92.8 billion KRW) for contract manufacturing organization (CMO) services with MSD's Swiss subsidiary, a global big pharma company. Following the increase of $352.66 million (approximately 381.9 billion KRW) to its existing contract with Belgian pharmaceutical company UCB on the 6th, this marks the second contract secured this year, continuing its smooth progress in contract acquisition.
Notably, both contracts are long-term agreements spanning 6 to 8 years, with UCB until 2030 and MSD until 2032, enabling Samsung Biologics to maintain stable plant operations. Additionally, the contract with MSD includes a 'minimum guaranteed amount,' indicating the possibility of additional orders similar to the UCB case.
With this, Samsung Biologics' total contract value for this year has reached $423.24 million (approximately 474.7 billion KRW). This is about 14% of last year's record-high contract value of 3.5009 trillion KRW since the company's founding. Considering that the first quarter is already ending, this proportion may seem small. However, last year’s contract value until March was similarly around 490 billion KRW, and the company accelerated its pace by announcing consecutive large-scale contracts from summer onward, indicating that its contract acquisition strategy is on track.
John Rim, CEO of Samsung Biologics, is presenting at the JP Morgan Healthcare Conference (JPMHC) held last January. [Photo by Samsung Biologics]
Samsung Biologics' key strengths in the contract competition are 'quality' and world-class production capacity. Since his appointment, CEO John Rim has emphasized quality, stating, "Flawless quality management is a value that can never be overemphasized and is the foundation of our industry." The success rate of production batches, the unit of pharmaceutical manufacturing, rose to 99% last year, and the goal is to achieve 100% this year. The cumulative number of regulatory approvals reached 268 as of last month, demonstrating outstanding quality capabilities.
Through this, the company recorded a contract growth rate nearly double that of the previous year, with $2.74 billion (approximately 3.5009 trillion KRW) in orders last year. In terms of contract quality, Samsung Biologics has secured 14 out of the global top 20 big pharma companies, including MSD, as clients, and continues to sign large-scale long-term contracts spanning 6 to 8 years. The company stated, "The contract with MSD is the second one signed following 2022," adding, "We are building trust with our clients based on production capacity, speed, and quality."
Regarding production capacity, Samsung Biologics has already secured the world's largest production capacity of 604,000 liters through Plants 1 to 4, and plans to add 720,000 liters at its 2nd Bio Campus by 2032, led by Plant 5, scheduled for completion in April next year. Even before completion, pre-orders linked to contracts made with Plant 4 are already coming in for Plant 5. The company is also considering expanding the 3rd Bio Campus to accommodate ongoing contract acquisitions. On the platform front, an antibody-drug conjugate (ADC) production facility, which has become a global trend, is expected to be completed within the year. To secure technology, collaborations are underway with Swiss company Araris and domestic companies LegoChemBio and AimedBio.
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