In March 2023, the Drug, Chemical & Associated Technologies Association held its annual DCAT week event in New York City. The event is one of the world’s largest gatherings of pharmaceutical companies and hosts a variety of meetings and announcements. Samsung Biologics, a leading contract development and manufacturing organization (CDMO), took the opportunity to outline its plans for expansion in 2023 and beyond, highlighting its investment of roughly $1.5 billion in a fifth plant at its Songdo, South Korea, headquarters.
The construction of Plant 5 is scheduled to begin in the first half of 2023. It will be the first facility built on Samsung Biologics’ new Bio Campus 2 and will follow the launch of full operations at the recently constructed Plant 4 in June. The fast-paced addition of plants speaks to Samsung Biologics’ aggressive growth strategy, which involves expanding its manufacturing capacity, diversifying its portfolio, and extending its international footprint.
It is a strategy outlined earlier in the year by Samsung Biologics president and CEO John Rim when he spoke on the main track at the 41st annual J.P. Morgan Healthcare conference.
“We will maintain our lead in manufacturing capacity with the full completion of Plant 4 in mid-2023 and invest another 7.5 trillion won in Bio Campus 2,” said Rim. “We are also considering expanding our CDMO services to include antibody-drug conjugate (ADC) and gene therapy.”
Plants 4 and 5 and CDMO Growth
For Rim, the pace at which Samsung Biologics can construct plants has been what sets it apart as a fast-growing CDMO. In a 2022 interview with BioProcess International, he explained that the rate of expansion is unprecedented in the industry, and it’s helped Samsung establish itself as a leader in biomanufacturing capacity in slightly over a decade of operations.
“There’s no company in the world that can build facilities faster than Samsung and that really comes down to the Samsung DNA,” said Rim. “Having that track record, having that experience, enables us to do simultaneous construction. In record time, [we do] engineering, procurement, construction, validation … facility ramp-up to [good manufacturing practices], probably 40% faster than all our competition. So that’s been spectacular,” he continued. “We are now on Plant 4 within 10 years, and I would say there’s no one in the world who’s done that and no one who has the biologic capability of building those facilities that quickly.”
Plant 4 is the largest facility of its kind, with 240,000 liters of capacity expected upon completion. As the plant became fully operational starting June 2023, the CDMO has quickly moved on to start constructing Plant 5.
Plant 5 is set to commence operations in 2025. It will cover 96,000 square meters and provide a capacity of 180,000 liters. The investment in Plant 5 is part of a $5.8 billion investment that Samsung Biologics is planning for Bio Campus II, which will also include additional large-scale plants and an open innovation center. With the completion of Plant 5, Samsung Biologics is expected to reach a total biomanufacturing capacity of 784,000 liters at its Songdo headquarters. The company’s first Bio Campus houses the first four biomanufacturing plants. With a total capacity of 604,000 liters, it provides the most total capacity at any single location in the world.
Samsung Biologics’ Fiscal Outlook
Samsung Biologics has been able to support this fast-paced expansion by demonstrating consistent financial growth. It recently released its earnings report for the first quarter of 2023, noting that it marked the 13th consecutive quarter of revenue growth for the company.
Revenue reached 720.9 billion South Korean won (roughly $538 million) for the first quarter of 2023, with a year-over-year increase of 209.6 billion won from Q1 2022. The CDMO also reported a year-over-year increase in operating profit, from 176.4 billion won in Q1 2022 to 191.7 billion won in Q1 2023.
“Enabled by the groundwork we have laid with our strategic capacity expansion plans, our first quarter results demonstrate stable revenue growth as we continue to drive strong operational excellence and business agility with full utilization of Plants 1, 2, and 3,” said Rim in a statement announcing the earnings report.
“With continued partnership expansion with global pharma, we are focused on achieving sustainable growth and securing more robust capacity with Plant 4 set to be fully operational by June and the groundbreaking of Plant 5 to occur later this year. We will continue to anticipate client needs and execute on opportunities to meet the increasing market demand for biomanufacturing capacity.”
The company emphasized that despite its rapid growth, it’s committed to fostering an era of sustainability in the industry. It plans to utilize 100% renewables with net-zero emissions by 2050, and the release noted that Samsung Biologics recently received the Sustainable Market Initiative’s Terra Carta Seal in recognition of a commitment to creating a sustainable future.