Samsung Biologics bags $183 million CMO order from Pfizer

Samsung Biologics Co., the world’s No. 1 contract drug maker in terms of production capacity, has won a $182.7 million contract manufacturing organization (CMO) order from Pfizer Inc.’s Ireland operation, raising expectations that the company’s orders for this year would hit a new record high.

The company announced in a regulatory filing on Thursday that it bagged a $182.7 million CMO order from Pfizer Ireland Pharmaceuticals Ringaskiddy on Feb. 28. It did not disclose the name of the medicine it will manufacture from Feb. 20, 2023 to Dec. 31, 2029 for the Ireland operation of American pharma behemoth Pfizer.

According to the company filing, the Pfizer order is equivalent to 15.4% of Samsung Biologics’ total sales in 2021, 1.57 trillion won. Including the latest contract, the company has secured 274.1 billion won worth of CMO orders so far this year.

This is the first time the biotechnology unit of Korea’s top conglomerate Samsung Group has unveiled its CMO contract with Pfizer. A Kospi-listed firm is required to report an order in a regulatory filing when it exceeds 5% of the company’s sales in the previous year (over 25% for a company with assets of 2 trillion won or more).

Considering that the Korean CMO giant’s annual production capacity is the world’s largest volume of 604,000 liters following the full opening of its 4th factory this year, and it is in talks with 23 clients to produce 34 pharmaceutical products, its total orders for this year could break the previous record high CMO order of 1.94 trillion won in 2020.  

It won orders worth 306.6 billion won in 2016, 153.5 billion won in 2017, 733.7 billion won in 2018, 308.4 billion won in 2019, 1.16 trillion won in 2021 and 1.78 trillion won in 2022.  

Following the order from Pfizer, Samsung Biologics now has seven big global pharma companies out of the world’s top 10 as its clients. The rest six are Johnson & Johnson, F. Hoffmann-La Roche AG, Novartis AG, Merck & Co. Inc., GSK plc, and Bristol Myers Squibb Co.

It has so far secured orders to manufacture 11 products with eight clients.

BRIGHT EARNINGS OUTLOOK FOR 2023

Samsung Biologics reported in January that its profit nearly doubled last year thanks to Samsung Bioepis Co., which was placed under its arms as a fully owned subsidiary after it completed the purchase of Biogen Inc.’s 50% stake in their former joint venture for $2.3 billion early last year.

Samsung Bioepis posted an operating profit of 231.5 billion won in 2022, up 20% from the prior year on sales of 946.3 billion won, 12% higher over the same period.

On a consolidated basis, Samsung Biologics’ operating profit for 2022 surged 83% on-year to 983.6 billion won on 3 trillion won in sales, up 91%.

Its separate operating profit also soared 80% to 968.1 billion won as sales jumped 55% to a record high of 2.4 trillion won. Its cumulative orders until 2022 reached $9.5 billion.

Its shares inched down 0.1% from Tuesday to close at 772,000 won on Thursday.  

The Korean financial market closed on Wednesday in observance of the Samil Independence Movement holiday on March 1.

Write to Yoorim Kim at youforest@hankyung.com

Sookyung Seo edited this article.