CDMO Samsung Biologics Releases Q2 2022 Earnings Report, Its First Since Full Acquisition of Samsung Bioepis

Samsung Biologics, one of the world’s largest contract development and manufacturing organizations (CDMO), has released its earnings report for the second quarter of 2022. The report was the first since the CDMO’s April 2022 acquisition of full ownership of Samsung Bioepis, a biosimilars company founded as a joint venture with Biogen in 2012, and it presented the consolidated financial position of Samsung Bioepis and Samsung Biologics. Samsung Biologics reported another quarter of significant year-over-year revenue gains following its first-quarter growth, with CEO John Rim noting that total revenue exceeded 1 trillion KRW (approximately $767 million) in the first half of 2022.

“Samsung Biologics delivered another strong quarterly performance ahead of our guidance, with our revenue exceeding 1 trillion KRW for the first half of the year,” said Rim. “Operations are seamless across all our plants, and the partial completion of Plant 4 is just around the corner, scheduled to commence operations in October this year. We completed a deal to fully acquire Samsung Bioepis, expanding and diversifying our revenue base and business portfolio. More recently, we have officially signed an agreement to purchase land for Bio Campus II. All these factors signal that we have a strong momentum going, and that we are well on track in our expansion plans to serve the increasing market demands.”

Second Quarter Growth Numbers

As a CDMO, Samsung Biologics continues to grow at an unprecedented pace, with stand-alone second-quarter revenue for 2022 totaling 503.7 billion KRW, up 22.2% from the 412.2 billion KRW it reported for the second quarter of the previous year. The company attributes this growth to its focus on efficiency in operations and an expansion of product sales.

Samsung Biologics also reported stand-alone operating profit of 171.9 billion KRW, a 3.18% year-over-year increase, with net profit of 101.8 billion KRW and an operating profit margin of 34.1%.

In addition to its sustained growth as a CDMO, Samsung Biologics continues to ramp up its portfolio diversification efforts, investing in biosimilars with its full acquisition of Samsung Bioepis in April, and developing end-to-end mRNA vaccine production capabilities first implemented in May with commercial-scale production of GreenLight Bioscience’s COVID-19 vaccine candidate.

“Samsung Group is committed to building up its biopharma business in the same way as it did with its electronics business; Samsung Electronics is close to $500 billion in size. To this end, the group has committed to a significant investment in biopharma over the next few years, including in the CDMO business, the pharma sector, and the biosimilar business, hence the decision to fully acquire Bioepis,” said Rim in a recent interview.

The second quarter of 2022 marks the first consolidated earnings report for Samsung Biologics and Samsung Bioepis, with total revenues of 651.4 billion KRW, operating profit of 169.7 billion KRW, net profit of 152 billion KRW and an estimated before interest, taxes, depreciation, and amortization margin of 39.7%.

Samsung Biologics’ full acquisition of Samsung Bioepis comes as the biosimilars company continues to grow as well. As a stand-alone, Samsung Bioepis earned 232.8 billion KRW in revenue in the second quarter of 2022 for 24.2% year-over-year growth. Its operating profit of 58.5 Billion KRW also increased by 95.7% compared to the prior-year period, with these increases caused by growing biosimilars sales in global markets, including the U.S. and Europe.

“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.

An Ever-Expanding CDMO

As Rim noted, Samsung Group is committed to investing in its biopharmaceuticals business, which means that, in addition to recording revenue increases in recent years, Samsung Biologics continues to actively pursue the expansion of its facilities.

The CDMO has established itself as an industry leader in manufacturing capacity with its three plants in Songdo, South Korea. It is currently in the process of constructing its fourth plant — which will be its largest — with an estimated capacity of 256,000 liters. The fourth plant will bring Samsung Biologics’ total capacity at its Songdo headquarters to approximately 620,000 liters, the largest capacity at any one location in the world. Plant 4 is expected to be ready ahead of schedule, with partial operations beginning in October 2022 and full operations set to begin in 2023.

For Rim, the speed at which the CDMO is able to construct these facilities has been a key contributor to its growth in recent years.

“Since its formation in 2011, Samsung Biologics has continually performed well, expanding both its footprint within Korea as well as the scope and scale of its CDMO services. We now have three plants of roughly 30,000, 150,000, and 180,000 liters respectively, all of which are running at almost full capacity, and phase one of a fourth 240,000-plus liter plant will come online in October 2022,” said Rim. “Operational excellence has been crucial to our strong performance; we do an outstanding job for our customers and are able to build facilities faster than any other player in the industry.”

Samsung Biologics is hoping to continue this track record with its plans to construct a second Bio Campus. In July, the CDMO acquired 357,366 square meters (about 88.3 acres) of land in the Songdo Industrial Cluster for the new facility. The land, which is valued at 426 billion KRW, covers an area that’s 30% larger than Samsung Biologics’ current Bio Campus.

“This milestone further solidifies our roadmap to build a world-class global bio hub at the heart of Songdo,” said Rim in a statement announcing the acquisition. “Through continuous investment, we will maintain our position as the best-in-class CDMO partner, fully equipped with the world’s largest manufacturing capacity, and provide diverse service offerings to our clients to address new emerging diseases and save lives of patients worldwide.”