Samsung Biologics announced July 2 that it has signed a $1.06 billion contract with a U.S.-based pharmaceutical company for the contract manufacturing of biopharmaceuticals. This is the largest contract ever secured by a South Korean biotech company and represents 42% of Samsung Biologics’ total orders from last year. The contract runs until Dec. 31, 2030.
This agreement finalizes a letter of intent (LOI) signed in June last year, with the final amount increased by $947.49 million. The previous record for the largest order was a 922.7 billion won contract with Pfizer last year, making this new contract 1.6 times larger.
With this contract, Samsung Biologics reported that its cumulative order value for the first half of this year has exceeded 2.5 trillion won. In just six months, the company has secured more than 70% of last year’s total order value of 3.5 trillion won. The company stated, “Six out of the seven contracts signed this year with global pharmaceutical companies were to increase existing production volumes,” attributing this to strong trust built with its partners.
The substantial increase in the contract amount compared to the LOI is believed to be influenced by the U.S. government’s move to sanction Chinese biotech companies. Recently, the U.S. Congress introduced the BIOSECURE Act, which restricts transactions with Chinese biotech firms, listing WuXi Biologics, the world’s third-largest contract development and manufacturing organization (CDMO), as a sanction target. With the possibility of the bill passing this year, global pharmaceutical companies are increasingly hesitant to sign new contracts with WuXi Biologics and are showing a preference for Samsung Biologics, the world’s fourth-largest CDMO. KB Securities analyst Kim Hye-min predicted that if the proposal passes, “Samsung Biologics’ performance could improve.”
