Samsung Biologics profits surge after flurry of major contract wins

Samsung Biologics reported a 49 percent on-year surge in operating profit to 253.4 billion won ($199 million), driven by the signing of large-scale contract manufacturing organization (CMO) deals and the global roll-out of its biosimilar products.

A digital-generated image of Samsung Biologics' Plant 5 in Songdo, Incheon [SAMSUNG BIOLOGICS]

Samsung Biologics reported a 49 percent on-year surge in operating profit to 253.4 billion won ($199 million), driven by the signing of large-scale contract manufacturing organization (CMO) deals and the global roll-out of its biosimilar products.

The figure beat the analyst forecast of 227.9 billion won compiled by FnGuide.

Quarterly revenue came in at 866.2 billion, up 33 percent on year, also beating the market expectation of 807.1 billion won.

With the latest earnings report, its operating profit and revenue for the first half of the year reached a record half-year figure for the company since it was established in 2011.

Half-yearly revenue came in at 1.59 trillion won, up 36 percent from the same period last year, while operating profit reached 445.2 billion won, up 29 percent on year.

Samsung Biologics cited the latest CMO contracts alongside improved production efficiency boosted by three of its fully-operational manufacturing plants as factors behind the results.

CMOs refer to companies that provide drug manufacturing services on a contract basis.

Samsung Biologics recently signed a five-year, $391 million deal with Novartis, a Swiss pharmaceutical company, which followed $897 million worth of deals with Pfizer Ireland Pharmaceuticals announced on July 4.

The combined value of all of the CMO contracts signed by Samsung Biologics so far this year comes in at $1.80 billion, outrunning last year’s total of $1.37 billion.

Samsung Biologics started full operation of its fourth plant in Songdo, Incheon, in June, which has a production capacity of 240,000 liters (63,401 gallons). It is the world’s largest single pharmaceutical manufacturing facility.

Samsung Bioepis, wholly owned by Samsung Biologics, posted an operating profit of 41.9 billion won, down 28 percent on year due to research and development expenses. Revenue rose 10 percent to 255.9 billion won.

Samsung Bioepis recently began selling Hadlima, a biosimilar of the blockbuster autoimmune diseases drug Humira, in the United States. Hadlima was recently included in Prime Therapeutics's formulary, crossing one of the biggest hurdles to tap an approximately $20 billion market.

BY SHIN HA-NEE [shin.hanee@joongang.co.kr]