SAN FRANCISCO, Calif. -- By Lee Han-soo/Korea Biomedical Review correspondent -- At the J.P. Morgan Healthcare Conference (JPMHC) 2024 being held in San Francisco from Monday to Thursday, Samsung Biologics presented a detailed overview of its strategic vision and accomplishments.

Samsung Biologics CEO John Rim highlighted its 2023 achievements and forecast for 2024 in the main track presentation on Tuesday.

“Despite a challenging business environment marked by the pandemic, increased interest rates, inflation, and global conflicts, Samsung Biologics maintained a robust growth trajectory,” Rim said. “By the third quarter of 2023, the company recorded a staggering 2.6 trillion won ($1.9 billion) in consolidated sales and 763.7 billion won in operating profit, marking significant increase of 29 percent and 14 percent from the previous year.”

Samsung Biologics consistently revised its revenue growth projections upwards, expecting to end the year with about 3.6 trillion won in sales in 2023, he added.

Rim attributed this success to the steadfast efforts and effective execution by the company’s employees.

“This figure represents a 12-fold increase compared to its 2016 sales, the year of its listing, demonstrating a remarkable compound annual growth rate (CAGR) of 40 percent,” Rim said.

The company's growth has been driven by expanding contracts with major pharmaceutical companies, including GSK, Eli Lilly, AstraZeneca, Moderna, Novartis, and Pfizer.

Since 2020, Samsung Biologics has secured 14 of the top 20 global big pharma companies as clients, with cumulative orders surpassing $12 billion, he added.

Looking ahead, Rim stressed Samsung Biologics is set to continue this momentum in 2024.

Rim emphasized the importance of order backlogs as the driver for such a momentum.

“These orders, primarily from various pharmaceutical and biotech firms, reflect a strong and persistent demand, with contracts typically spanning five to seven years,” he said. “This backlog, according to Rim, is a testament to the company's resilience and competitive edge in the biopharmaceutical industry.”

According to Rim, Samsung Biologics has not only focused on financial growth but also on expanding its operational capacities and geographic presence.

“The completion and ramp-up of our largest plant, the fourth plant, is a significant milestone, enhancing both production capabilities and the quality of what we offer,” he said. “Also, as we announced plans for its fifth plant as part of the new Bio Campus 2 initiative in March of last year, with an anticipated operational starts in April 2025.”

When completed the total production capacity to 784,000 liters, he added.

Aside from ramping up contract manufacturing organization (CMO) capabilities, Samsung Biologics has also invested in next-generation bio-technologies like ADC (Antibody-drug conjugates) and is exploring CMO expansions into new modalities such as AAV (Adeno-Associated Virus), mRNA, and CGT (Cell and Gene Therapy) domains.

“The company's involvement in Samsung Life Science Fund and investments in biotech firms like Araris Biotech and AimedBio underscore its commitment to innovation,” Rim said. ”While the AAV market is still nascent, I am optimistic about the potential growth in this sector.”

Also, Samsung Biologics is already actively involved in mRNA technology, with plans to delve deeper into virus-related therapies, he added.

Rim also emphasized Samsung Biologics' strategy is sustainable growth.

“As the only CDMO company in the Sustainable Markets Initiative's Health Systems Task Force, we have actively engaged in climate change responses,” he said. “This approach is further evidenced by its receipt of the Terra Carta Seal for its roadmap towards carbon neutrality by 2050 and its membership in the UN Global Compact.”

Looking ahead to 2030, Samsung Biologics aims to enhance its global footprint, particularly in key regions like the U.S. and Europe, through strategic expansions, investments, and mergers and acquisitions, he added.

Rim explained that this holistic approach, blending organic and inorganic strategies, positions the company to ascend as a global top-tier bio-enterprise, continually pushing the boundaries of innovation and operational excellence.

Concerns over trade secrets in employee resignations

Meanwhile, during a separate conversation with Korean reporters, Rim also addressed employee dynamics.

Rim highlighted the importance of nurturing talent within the company, citing rapid promotions and significant responsibilities given to employees, including leadership roles in manufacturing plants.

He also expressed concern about the issue of employees leaving with trade secrets, emphasizing the legal and ethical implications of such actions.

Samsung Biologics had previously filed several lawsuits against former turnover employees for breaching trade secrets and seen a few cases where employees were arrested for trying to illegally smuggle out confidential company material.

“I believe employee turnover is good for the Korean economy and for employee themselves,” he said. “My concern is with employees taking trade secrets when they leave as it's not only illegal but also unethical.”

Even though it's a known issue in both the U.S. and Korea, it seems people do not take it as seriously as they should, he added.

Rim stressed that the issue of trade secrets, vital intellectual property crafted within a company, being taken by employees to new workplaces, poses a significant risk to the competitive advantage and operational integrity of businesses like Samsung Biologics.

"What's worrying is that employees are aware that it's illegal to take these secrets with them, yet it still happens and this is why we had to take legal actions in some cases," Rim explained.