Samsung Biologics, a contract development and manufacturing organization (CDMO) established in 2012, has seen a significant expansion in recent years — and with expansion comes expanding growth, like its recent deal with Pfizer, and potential snafus, like its current dispute with Lotte.

Samsung’s portfolio has grown beyond an initial focus on monoclonal antibodies to include biosimilars and mRNA vaccine production, and the company has continually invested in capacity growth. Its fourth manufacturing plant, which became fully operational in June, extends Samsung Biologics’ capacity by 240,000 liters, resulting in an industry-leading total of 604,000 liters. The expansion reflects a broader trend in the CDMO industry, as firms are increasing their production capabilities to accommodate a growing demand for biopharmaceutical products.

In line with this trend, Samsung Biologics announced an extended partnership with Pfizer in July. The association involves deals worth $897 million, including a single contract valued at $704 million — the most substantial in Samsung Biologics’ history. The crux of this contract is the production of biosimilars at the new plant, dubbed Plant 4.

With these new deals, Pfizer’s total orders from Samsung Biologics for 2023 amount to $1.08 billion. Though neither side has confirmed, the industry expects that Notably, a significant portion of this partnership is expected to be allocated to the production of a biosimilar alternative to AbbVie’s Humira, a popular medication for various autoimmune disorders and inflammation. The 2023 patent expiration for Humira has created an opportunity for Samsung Biologics to capitalize on its biosimilar production capabilities. 

Apart from the milestone deal with Pfizer, Samsung Biologics has been in the news for its legal action against Lotte Biologics, a recent entrant in the CDMO sector. Samsung Biologics filed a preliminary injunction alleging that Lotte illegally acquired trade secrets from former Samsung employees. This claim spotlights an often-overlooked aspect of the industry — intellectual property protection. As the biopharmaceutical field expands and new players emerge, safeguarding proprietary information has become a primary concern.

The recent activities of Samsung Biologics offer a snapshot of an evolving industry. As the demand for outsourced biopharmaceutical production grows, CDMOs like Samsung Biologics will continue to play a critical role. Simultaneously, as new companies like Lotte enter this growing field, issues surrounding intellectual property protection and competition are likely to become even more pressing. 

The Growing Market for Biosimilars

Biosimilars fill a market gap akin to generic drugs, offering less expensive versions of patented biopharmaceutical products after their exclusivity periods end. 

The biosimilars market is burgeoning for several reasons. The patents for a number of blockbuster biologic drugs, with Humira the leading example, are expiring. Biologics, as opposed to conventional chemically synthesized drugs, are complex molecules or mixtures of molecules derived from living entities. They’ve been responsible for significant breakthroughs in treating diseases that were previously deemed untreatable. However, the costs of producing patented biologics, including manufacturing processes and the initial investment in research and development, can sometimes increase drug prices for consumers. Biosimilars, developed after the original biologic’s patent expires, can provide a more cost-effective alternative, making these crucial treatments more accessible.

In addition, regulatory authorities worldwide have started to establish clear pathways for the approval of biosimilars, providing a more predictable and efficient process for their development and market launch. With a growing market, established regulatory pathways, and increasing acceptance, biosimilars represent a significant area of growth. 

CDMO Industry Implications

Samsung Biologics’ recent activity sheds light on the current dynamics and future trajectory of the industry.

The large-scale deal with Pfizer signals a growing trend of collaboration between pharmaceutical giants and CDMOs, with these large pharmaceutical companies increasingly outsourcing manufacturing to free up resources for R&D. Samsung Biologics’ expanded manufacturing capabilities, represented by Plant 4, align with this trend, illustrating how CDMOs are preparing to meet the growing demand for outsourced manufacturing.

The focus on biosimilars also indicates a strategic shift in the industry. As more patents for biologic drugs expire, the production of biosimilars represents a potential area of immense growth. Companies that can offer high-quality, cost-effective biosimilar production are likely to gain a competitive edge. The Pfizer-Samsung Biologics deal exemplifies this potential.

Finally, the lawsuit against Lotte Biologics serves as a reminder of the importance of intellectual property protection in the industry. The claim that Lotte stole trade secrets from Samsung Biologics, if substantiated, could have serious implications for Lotte. Moreover, it raises questions about industry practices and employee conduct, underlining the need for stringent regulations and ethical guidelines as the industry evolves.

Looking Ahead

While continuing to service its existing partnerships, Samsung Biologics is also planning further expansion. The company has disclosed plans to construct a fifth plant, expected to be completed by 2025, which would further expand its total capacity to 784,000 liters. This plant, part of a larger Bio Campus 2 facility, stands to solidify Samsung Biologics’ position as a leading player in the CDMO industry.

“We are pleased to extend the strategic collaboration with Pfizer as we share and support their strong vision to bring innovative solutions for patients around the globe,” said John Rim, president and CEO of Samsung Biologics, in a statement in June. “This new meaningful partnership comes just as our Plant 4 is fully completed early this month as we had previously committed and are on the move for future expansion into our second campus in order to provide our clients with even more flexible and advanced manufacturing technology.”

By Manali