Samsung Biologics Signs $1.24 Billion Contract, Makes History but Faces Quality Crisis

Samsung Biologics officially announced on Tuesday that it has signed a contract manufacturing agreement with an Asian pharmaceutical giant worth up to $1.24 billion. The agreement set a new record for the largest single contract in Samsung's biologics history in just three months.

The contract name of the deal has not been disclosed in a regulatory filing, but the value of the deal is well over 1.7 trillion won ($1.24 billion), accounting for nearly half of the company's total contract value of 3.5 trillion won last year. The contract will run until the end of 2037.

It is worth noting that this agreement was reached only three months after Samsung Biologics signed another largest single contract with a US company of up to 1.46 trillion won. This signing marks the first time in a year that Samsung Biologics has achieved the milestone of exceeding 4 trillion won in order size. Since March this year, the company has signed a total of nine contracts with global pharmaceutical companies, with a total contract value of 4.36 trillion won, which is a 20% increase from the cumulative order volume in the same period last year.

Looking back on the development of the past few years, the order volume of Samsung biologics shows a steady growth trend. The order book nearly doubled from 1.16 trillion won in 2021 to 1.78 trillion won in 2022 and 3.5 trillion won last year.

At present, Samsung Biologics enjoys high recognition among global pharmaceutical companies, and 17 of the world's top 20 pharmaceutical companies have chosen the company as a contract manufacturing partner. Since its inception, the company has signed more than $15.4 billion in contracts and won widespread praise for its manufacturing excellence, quality competitiveness and multiple performance achievements.

To meet the growing demand for biopharmaceutical products in the global market, Samsung Biologics is building its fifth plant in the Songdo area of Incheon to further expand its production capacity. The plant, which is expected to begin production in April next year, will have an annual capacity of 180,000 litres, bringing the company's total annual capacity to 784,000 litres.

In terms of product quality control, Samsung biologics also performs well. So far, the company has produced 100 batches of apis, only one product is defective, and the batch success rate is as high as 99%. In addition, the company has received a total of 326 manufacturing approvals from global regulatory agencies, including 39 from the US Food and Drug Administration (FDA) and 34 from the European Medicines Agency (EMA).

Samsung Biologics said it will continue to actively participate in global biologics and pharmaceutical conferences to further expand its business network and secure more opportunities for future contracts. Earlier this month, the company sent staff to attend events such as the CPHI World Biotrade show in Milan, Italy, and BioJapan 2024 in Yokohama.