It has been found that Samsung Biologics’ sales reached 294.6 billion won last year, up 337% from a year ago, and its operating loss decreased 30% to 30.4 billion won during the same period. SK Biotek’s sales and operating profit totaled 101.2 billion won (up 30% year on year) and 29.4 billion won (up 50% year on year) in 2016. During the period, the sales and operating profit of the life science business division of LG Chem increased 18.2% and 87.3% to 532.3 billion won and 47.2 billion won, respectively.
At present, Samsung Biologics is a contract manufacturing organization (CMO) supplying its biopharmaceuticals to three to four multinational pharmaceutical companies. It recently obtained approvals from the Food and Drug Administration of the United States and the European Medicines Agency for the production of seven different medicines. In addition, it signed a contract manufacturing contract worth 306.6 billion won with Cilag GmbH International, a subsidiary of Janssen, in November last year.
In the meantime, the outpatient prescription sales of LG Chem’s Zemiglo, the first new diabetes drug in South Korea, amounted to 21 billion won last year. The company is currently exporting Yvoire, the first hyaluronic acid filler in the country, to 20 or countries like China, Russia and India while enjoying a high market share in South Korea with it as well.
SK Biotek is supplying its pharmaceutical raw materials to an increasing number of multinational companies. Its new plant located in Sejong City is in trial operation now before the start of production scheduled for May this year. Then, its pharmaceutical raw material supply capacity increases to 160,000 liters a year. The capacity is slated to reach 800,000 liters a year in 2020 through facility expansion.
These South Korean companies’ growth is likely to speed up down the road along with that of the global biopharmaceutical market. For example, the global biosimilar market is forecast to show an average annual growth rate of 38% until 2025 to reach US$66 billion.
Samsung Biologics is currently building its third plant and this biosimilar plant has an annual manufacturing capacity of 180,000 liters, second to none in the world. The mechanical completion of this plant is scheduled for the fourth quarter of this year and the company is planning to complete the examination of it by 2018. Then, Samsung Biologics becomes the largest CMO in the world. It also announced last year that it would invest 400 billion won obtained as a result of its listing on KOSPI in its subsidiary Samsung Bioepis.
SK Biotek’s order backlog for the first two months of this year already exceeded 90% of its backlog for last year as a whole. Most of its products are exported to multinational pharmaceutical companies based in North America and Europe. SK Biotek is currently aiming to expand its business to cover finished pharmaceutical products and become one of the global top 10 CMOs with 1.5 trillion won in sales and at least four trillion won in enterprise value by 2020.
The life science business division of LG Chem is working on a new plant in North Chungcheong Province, South Korea for sufficient supply of hexavalent vaccines and pneumococcal vaccines it is currently developing as well as its hepatitis B vaccines and pentavalent combination vaccines exported via the WHO. LG Chem earmarked an R&D budget of more than 100 billion won for the division this year.