Excluding Chinese CDMO Companies in the US Brings 'Reflexive Benefits'
Current Production Facilities Available for Acquisition
Samsung Securities has raised the target price of Samsung Biologics to 1 million KRW. This is based on the analysis that Samsung Biologics, which can secure production facilities in the U.S., will benefit as the U.S. excludes Chinese biopharmaceutical contract development and manufacturing organizations (CDMOs) in line with its policy of domestic pharmaceutical production.
On the 25th, Senior Analyst Seogeunhee of Samsung Securities stated in a report, "Swiss global CDMO Lonza has acquired pharmaceutical production facilities in the U.S.," adding, "This confirms the high demand for antibody drugs and the necessity of securing production bases within the U.S."
Lonza recently acquired a manufacturing facility in California, U.S., for $1.2 billion (approximately 1.7 trillion KRW). It is expected to produce 330,000 liters of antibody drugs at this production facility. Lonza plans to invest an additional $560 million (approximately 800 billion KRW) to upgrade the production facility.
Analyst Seo said, "Lonza's acquisition of antibody-drug conjugate (ADC) related production facilities is an extension of its closure of the Guangzhou, China production site and the acquisition of the Netherlands-based Synaffix," adding, "The commercialization demand for multi-product small-volume production of monoclonal antibodies remains high, and this case shows the importance of securing production bases within the U.S. despite high costs."
He added, "As the U.S. government has proposed the Biosecure Act, restricting transactions with companies headquartered in China such as Wuxi AppTec (Yangming Gangde) based in Hong Kong," he forecasted, "In this trend, Samsung Biologics, recognized globally as a competitive CDMO and capable of establishing an allied production system with the U.S. government, is likely to gain indirect benefits."
He continued, "Samsung Biologics has strong cash-generating capabilities, and with the lowering of local interest rates in the U.S., a favorable environment for funding biopharmaceutical companies is being created," forecasting, "It is expected to secure production facilities in the U.S. through mergers and acquisitions (M&A)."
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