The Korea Herald


Samsung Biologics posts all-time-high earnings for H1

By Shim Woo-hyun

Published : July 26, 2023 - 18:13

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Samsung Biologics’ Plant 3 (Samsung Biologics) Samsung Biologics’ Plant 3 (Samsung Biologics)

Samsung Biologics said Wednesday that the company’s earnings in the first half reached all-time highs, with 1.59 trillion won ($1.23 billion) in sales and an operating profit of 445.2 billion won, supported by a solid contract-winning spree.

Compared with the first half of last year, Samsung Biologics' sales increased by 36 percent, while its operating profit climbed 29 percent.

Samsung Biologics’ attributed its improved earnings this year to the large-scale contract manufacturing deals that the company has secured over the last three years.

The company said the combined value of the contracts signed during the last three years reached around 4.8 trillion won, other than the deals that the company secured this year.

This year alone, the company has signed several large-scale deals with international pharmaceutical firms. The combined value of total contracts that it signed this year so far is 2.3 trillion won, surpassing the total amount of deals signed last year, 1.8 trillion won.

According to its regulatory filing released on Wednesday, the company’s sales in the second quarter reached 866.2 billion won, up 20.1 percent on-year. Its operating profit during the period came to 253.4 billion won, also up 32.2 percent on-year. The figures are the highest Q2 figures in the company’s history.

In the first quarter too, Samsung Biologics posted its highest Q1 earnings ever, with 720.9 billion won in sales and 191.7 billion won in operating profit.

Earlier in July, Samsung Biologics completed two record deals worth $897 million with Pfizer to produce the latter’s pharmaceutical products at the fourth plant. Including a $183 million deal signed in March, the combined value of Samsung Biologics-Pfizer deals this year amounts to a total of $1.08 billion.

The company’s other contract manufacturing deals with global pharmaceutical companies this year include a $27 million deal with GSK in February, a $177 million deal with Eli Lilly in March and a $11 million deal with Roche in June.

“Most of the recently signed contract manufacturing deals are long-term contracts that run for around 6-7 years. (Samsung Biologics) expects they will help the company’s sales to continue the upward trend in the future,” an official from Samsung Biologics said.

In terms of the operations of the firm's newly constructed fourth plant, Samsung Biologics said it has signed deals with 10 clients to manufacture 16 products at the plant so far. The company is also in discussions with 30 clients to produce 46 other pharmaceutical products.

According to the company, revenue from the fourth plant will be reflected in the company’s upcoming earnings reports, starting in the third quarter of this year, although there will be differences in when each contract starts to generate revenue and be included in its earnings reports.

Meanwhile, the company began construction of its fifth plant in April. When the construction of the new plant -- which will have a manufacturing capacity of 180,000 liters -- is completed in April 2025, the company’s total manufacturing capacity will reach 78.4 liters, widening gaps with its competitors in the CDMO market.

At the moment, Samsung Biologics has a combined manufacturing capacity of 604,000 liters, which accounts for nearly 30 percent of the global contract manufacturing market for biopharmaceuticals.