Samsung BioLogics saw its earnings surge last year, as it pursued more contract research orders on top of contract development and manufacturing. The company’s annual sales surpassed 700 billion won ($600 million) in 2019, which was a record high.
Samsung BioLogics said Wednesday its annual revenue went up 30.9 percent on-year to 701.6 billion won in 2019, and operating profit, up 64.8 percent to 91.7 billion won.
The biopharmaceutical unit of Samsung Group attributed the robust earnings to increased operating rates at the three factories and the lower value of the local currency.
Net profit, however, went down 9.5 percent to 202.9 billion won during the cited period, due to base effects from stock disposal gains with the exercise of Biogen call option in 2018. Excluding the stock disposal gains of 389.2 billion won, the net profit increased in 2019, the company said.
About half of the 2019 revenue was generated in the fourth quarter. As the operating rate rose in the second plant and the production from the third plant contributed to sales, the fourth-quarter sales jumped by 313.3 billion won.
Samsung BioLogics aggressively expanded manufacturing facilities from 2011 to 2018. After breaking ground for the 30,000-liter first plant in 2011, the company built the 150,000-liter second plant in 2013, and the 180,000-liter third plant in 2015. The three plants are capable of producing 360,000 liters, the largest manufacturing capacity among contract manufacturing organizations (CMO) around the world.
Samsung BioLogics sought expansion not only in the manufacturing capacity but the business scope. The company initially focused on contract manufacturing organization (CMO) orders and entered the contract development organization (CDO) market in 2017 and won the first CDO order in January 2018. Adding contract research organization (CRO) business to conduct clinical trials on behalf of clients, the company could provide a “one-stop service” from clinical trials to licensing and manufacturing in all stages of new drug development.
Samsung BioLogics’ accumulated orders jumped from 15 in 2017 to 87 in 2019. The company received increasing orders particularly as CDO, which was up from five in 2018 to 42 in 2019.
This year, the company aims to win over 12 orders as CMO and over 18 orders as CDO. As the third plant is not producing in its full capacity, the company plans to raise the proportion of the manufacturing from the third plant out of the entire production to exceed 60 percent by the end of the year. To do so, Samsung BioLogics said it will establish an R&D research center for CDO in San Francisco, the U.S., to win more orders as CDO.
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