CDMO Samsung Biologics and Novartis Expand Partnership for $391 Million

Contract development and manufacturing organization (CDMO) Samsung Biologics has announced several partnerships in recent months. The company inked a multipart, $897 million deal with Pfizer in early July, and followed that up in the same month with a $391 million contract with Novartis. 

For many industry watchers, it comes as no surprise that the biopharmaceuticals sector, which includes CDMOs and larger pharmaceutical companies, has become a significant segment of the health care market. Samsung Biologics, Pfizer, and Novartis are among several companies to pursue recent innovations in biotechnology in areas such as monoclonal antibodies, mRNA vaccines, and biosimilars. Advancements in these spaces hold the promise of treating conditions ranging from arthritis to cancer. 

Given this potential, biopharmaceutical companies have increasingly been a popular investment. To compound the fervor, artificial intelligence and other technological advancements have facilitated the development of research that had been somewhat latent for years. The most visible example of this development is the accelerated approval and successful use of mRNA vaccines to combat the COVID-19 pandemic. 

Samsung Biologics’ deals with Novartis and Pfizer could signal more of a rule than an exception as the CDMO industry continues to evolve. Biosimilars, which have been a focus for many companies in recent years, offer a cost-effective alternative to popular biologic drugs. These drugs are the focus of Samsung Biologics’ recent contracts. And they’re part of a more significant biotechnology industry that’s growing at an exponential pace. A 2021 report in Nature highlighted biotech as one of the fastest-growing sectors of the U.S. economy, with an estimated annual contribution of $300 billion to $400 billion.

While neither company has confirmed, it’s widely believed that the partnership between Samsung Biologics and Pfizer will involve manufacturing a biosimilar for adalimumab, the generic name for Humira, which is the world’s most prescribed drug. Adalimumab is prescribed to treat a range of inflammatory conditions such as rheumatoid arthritis, psoriasis, psoriatic arthritis, ankylosing spondylitis, and Crohn’s disease. 

John Rim, CEO of Samsung Biologics, is optimistic about the ability of CDMOs to help produce these sorts of medicines at a more efficient scale, and also about their increasing availability. 

“Health authorities across the globe are recognizing biosimilars as a cost-effective solution that will bring medical products to larger populations and also enable better government spending,” said Rim in an interview with PharmaBoardroom in 2022. 

Novartis and Pfizer Seek CDMO Partnership

Novartis’ $391 million contract with Samsung Biologics extends an earlier agreement between the two companies, which was signed for $81 million in June 2022. 

In addition to the Novartis contract, Samsung Biologics has expanded its 2023 collaboration with Pfizer. The CDMO added $486 million to two previously established biosimilar production contracts from earlier in the year. These contracts are expected to focus on Pfizer’s biosimilar drug production in crucial health sectors such as immunology, oncology, and inflammation. The recent contracts were added to Samsung Biologics’ $193 million deal with Pfizer, signed in March 2023.

While the Novartis contract’s monetary value is less than the June deal with Pfizer, it still marks a significant milestone for Samsung Biologics. It’s the company’s second-highest production contract ever, outstripping a significant $360 million contract with AstraZeneca that was signed last year.

Samsung Biologics’ Growth

Samsung Biologics’ contract disclosures for 2023 now total $1.7 billion, showing a robust growth trend in its contract manufacturing services that tracks with an overall industry trend. The company has embarked on a continuous, extensive expansion campaign since its establishment in 2012, and it’s now reached a point at which it’s fighting off upstart competitors. Just days before announcing the Pfizer and Novartis contracts, Samsung Biologics was granted a preliminary injunction against Lotte Biologics in a trade secrets dispute.

Following the completion of its fourth plant in June, the CDMO is planning to commence construction of a fifth manufacturing plant this year. This move is part of Samsung Biologics’ strategic plan for continuous capacity expansion, and the new facility is expected to start operations in 2025. The construction of a second campus is one of the company’s many proactive steps to accommodate growing manufacturing commitments and enhance its production capabilities. 

Rim explained the Samsung Biologics’ strategy at the 2023 J.P. Morgan Healthcare Conference in January. He highlighted the company’s investment in a new Bio Campus at its Sangdo, South Korea, headquarters, as well as its commitment to diversifying its portfolio and building on its status as a leader of biomanufacturing capacity.

“The company plans to expand its portfolio, such as antibody drug conjugates and cell and gene therapy in line with market changes and prepare a foundation for sustainable growth,” Rim said. 

“Samsung has had phenomenal organic growth, such as investing in Bio Campus 2, continuing to build new plants, operating our CDO business, expanding our sales offices, advancing new technologies. We are formalizing a plan and will pursue both organic and inorganic strategy to further grow Samsung Biologics.”