South Korea conglomerate Samsung Group is taking advantage of the recent boom in demand for biologics as a result of the international virus pandemic and building what will be the world's largest drug manufacturing plant.
Through its partly owned drug unit Samsung Biologics, the company will spend big to increase its capacity to produce high-demand biologic drug ingredients.
Samsung Biologics recently started building a $2 billion drug manufacturing factory which it calls the "Super Plant." The factory will be the company's largest and fourth drug-making plant with a total floor area of nearly 2.5 million square feet. According to Samsung Biologics, the new plant, which is expected to be completed in 2022, will be larger than its three existing factories combined.
While it may be late to the party in terms of being a significant biopharmaceutical supplier, Samsung has the resources and the capacity to take a good chunk of the market, it said. The company's strategy to capture a part of the unprecedented demand is to significantly boost production capacity and leverage its scale.
Since the start of the pandemic this year, demand for complex medicines, including biologics, has grown substantially - to the benefit of Samsung's Biologics. The company saw its business expand over the past few quarters. Samsung Biologics currently makes biologic drugs for some of the world's largest pharmaceutical companies - including Roche Holding and Bristol Myers Squibb.
According to its latest earnings, manufacturing orders over its most recent quarter nearly tripled to more than $1.5 billion. This included a deal with GlaxoSmithKline PLC. The coronavirus pandemic has given the company a lot more opportunities than problems, chief executive officer Kim Tae-han said in an interview.
The company's three existing factories are nearing capacity, hence the need for a new facility.
The international biologics industry is expected to continue its growth in the coming years as the need for more complex treatments increases. Biotechnology currently makes up around 30 percent of worldwide over-the-counter and prescription drug sales, according to research company Evaluate Pharma. Unlike traditional medications, biologic drugs utilize compounds and ingredients derived from living cells. The manufacturing of these drugs often involves time-consuming and expensive research, development and clinical trials.
Samsung Biologics is 43.44 percent owned by Samsung C&T and 31.49 percent owned by Samsung Electronics - both Samsung Group affiliated companies.