Samsung Biologics announces plans for four new factories

Samsung Biologics plans to build four new factories in a new manufacturing complex right next to its existing plants in Songdo, Incheon, committing 7.5 trillion won ($6 billion) into constructing the new cluster.

Samsung Biologics CEO John Rim speaks during the annual J.P. Morgan Healthcare Conference Wednesday in San Francisco. [SAMSUNG BIOLOGICS]

SAN FRANCISCO - Samsung Biologics plans to build four new factories in a new manufacturing complex right next to its existing plants in Songdo, Incheon, committing 7.5 trillion won ($6 billion) into constructing the new cluster.

Samsung Biologics CEO John Rim pitched the expansion plan during the annual J.P. Morgan Healthcare Conference on Wednesday.

The second complex, dubbed Bio Campus II, will be built on a land plot of 357,000 square meters (3.8 million square feet) that it already bought for 426 billion won. Each plant will have a 180,000-liter capacity, for a combined 720,000 liters, according to Rim.

“We've purchased the Campus II, which is 80 acres or about 50 soccer fields in size. Our plan is to have additional plants in that location."

Rim did not specify when the construction for the first plant would begin, adding that the company is waiting for the proper moment.

The announcement comes after the biopharmaceutical company started partial operation of its fourth plant in the first manufacturing complex. The full operation will start by June, this year.

The latest fourth plant boasts an annual capacity of 240,000 liters, the largest for a single contract manufacturing plant in the bio industry. Its completion will likely bring the company's annual production capacity to 604,000 liters, which Samsung Biologics says is equivalent to nearly 30 percent of the global contract manufacturing market for biopharmaceuticals.

Asked if ramping up production would result in some kind of oversupply, Rim brushed off any concerns, citing solid demand for biopharmaceutical products.

The company's backlog orders — or orders that customers have made but which have not yet been shipped out — total $8.5 billion.

With the physical expansion, Samsung Biologics will pivot to contract manufacturing and the development of next-generation drugs like Antibody Drug Conjugates (ADCs), Rim said.

An ADC-dedicated line is under construction and will be up and running in early 2024.

“We are going into ADC and we will have a manufacturing plant in Plant 4. Within that space, [the ADC line will be] up and running in the early part of 2024,” Rim said.

ADCs are designed as targeted therapies to treat cancer and differ from chemotherapy by sparing healthy cells in the treated areas, a feature that makes some specialists hail them as a next-level technology in cancer treatment.

Fresh opportunities are also coming with a wave of blockbuster drugs being approved in neurology, the CEO said, such as Lecanemab. The U.S. Food and Drug Administration (FDA) last week approved Lecanemab, a treatment for Alzheimer’s jointly developed by Cambridge, Massachusetts-based Biogen and Japan’s Eisai.

The Songdo, Incheon-based company plans to invest in a corporation specializing in ADC through Life Science Fund, an investment fund jointly run with Samsung C&T, the largest shareholder of Samsung Biologics. The investment is scheduled to be made in the first quarter, though the CEO declined to mention its target date.

After the Life Science Fund was created, Samsung Biologics in March also invested in Senda Biosciences, a Massachusetts-based biotech company, and Jaguar Gene Therapy, an Illinois-based biotech company specializing in gene therapy development.

To bolster its contract development organization (CDO) business, the company has set up a sales office in New Jersey to get better access to clients, whose headquarters are mostly in North America and Europe.

CDOs, with their clients, develop cell lines and manufacturing processes and produce drug candidates for early phase clinical trials. They are used by smaller bio start-ups that have the technology but not the experience or capacity to develop biopharmaceuticals, which are typically long-term projects with a low chance of success.

The CEO went on to celebrate the widening client base centered around big pharmas as it is in negotiation with 26 pharmaceutical companies.

Its new contractors last year include AstraZeneca, GSK, Johnson & Johnson and Eli Lilly.

BY PARK EUN-JEE [park.eunjee@joongang.co.kr]