Contract development and manufacturing organization Samsung Biologics will invest $6 billion in the development of its second Bio Campus at its headquarters in Songdo, South Korea. Samsung Biologics CEO John Rim announced the figure at the 2023 J.P. Morgan Healthcare Conference in January, where he further outlined the CDMO’s plans for future growth and noted some of its recent accomplishments and strategic initiatives.
“The company plans to invest a total of 7.5 trillion [South Korean] won [$6 billion] in constructing four new plants and a bio innovation center to nurture promising companies related to next-generation medicines,” said Rim. “The company will decide on building a fifth plant within this year after the fourth plant becomes fully operational.”
Anchoring a Biotech Hub
Samsung Biologics purchased the land for Bio Campus 2 in July 2022. The 357,366-square-meter (about 88.3 acres) location in the Incheon Free Economic Zone is 30% larger than the CDMO’s first Bio Campus.
While Rim explained that the company is still looking into options for international growth, its decision to construct another facility in South Korea came down to the speed at which the project could proceed, as well as the support from the Korean government for making the country a new biotech hub.
Similar considerations led Samsung Biologics to construct its Plant 4 facility in South Korea, which became partially operational in 2022, just 23 months after breaking ground at the Songdo site; it will be fully functional in 2023.
“What we came to at that time was that the speed to construct the facility and get it up and running was much more secure in Korea than it was in the United States,” said Rim in a recent interview, noting that the pandemic contributed to the decision. “So, we made the decision then to really build Plant 4 in Korea. And I think in retrospect, it was the right decision.”
Rim’s decision to continue its expansion in Songdo with the construction of Bio Campus 2 will have a substantial impact on the growth of the biotech industry in the region. In addition to housing an innovation center designed to support biotech startups, the new facility is expected to generate around 4,000 jobs by its anticipated completion date of 2032.
“Samsung Biologics’ achievements over the past decade are remarkable and highly impressive,” said Yoo Jeong-bok, mayor of Incheon Metropolitan City, when plans for Bio Campus 2 were announced last year. “The city will do its best to support the development of the bio industry’s infrastructure and further drive Songdo to become a global bio hub.”
Global Expansion Plans
While Samsung Biologics continues to be at the center of the biotech boom in South Korea, the CDMO is also pursuing global expansion plans. Rim identified increasing the company’s global footprint as one of three pillars of the company’s multidimensional growth strategy.
Samsung Biologics already operates an R&D center in San Francisco, which it opened in 2020 to facilitate contact with its clients based in or around the U.S. The center focuses on development services rather than manufacturing, specializing in cell line development using Samsung Biologics’ proprietary S-CHOice technology. It’s a prime example of Samsung Biologics’ continued effort to expand its development capabilities in tandem with growing its manufacturing capacity.
The CDMO also opened a sales office in New Jersey in March 2023 to provide streamlined communication and support to clients based in the U.S. and Europe.
CDMO Market Growth
In 2022, Samsung Biologics netted its highest revenues of its 11 years of operations. According to the CDMO’s fourth quarter earnings report, its fiscal year totals in revenue reached 3 trillion won, a 55% year-over-year increase compared to 2021. Its operating profit increased from 536.5 billion won in 2021 to 968.1 billion won in 2022.
This growth is indicative of a broader trend of increasing reliance on CDMO services in the biopharmaceutical industry. Growth was already occurring prior to the COVID-19 pandemic, but increased demand for mRNA vaccine production, as well as supply chain issues caused by the pandemic, accelerated this expansion. Companies are realizing that the agility and faster timescales offered by contract manufacturers can be crucial in navigating unexpected adjustments and allowing more allocation of resources to the development side of their business.
As the largest CDMO in terms of manufacturing capacity, Samsung Biologics has been able to meet this increasing demand. Rim sees the next step as becoming an all-around “top-tier” pharmaceutical company by 2030.
“Samsung has had phenomenal organic growth, such as investing in Bio Campus 2, continuing to build new plants, operating our CDO business, expanding our sales offices, [and] advancing new technologies,” he said.