By Kim Yoo-chul
Samsung Electronics’ aspirations to find a new growth engine in biotechnology and pharmaceuticals appear to have hit a speed bump. Company officials admit that it has halted clinical tests for SAIT101, a material it hoped would create more effective drugs to fight Hodgkin’s disease.
``We have been conducting clinical tests for SAIT101 in our labs in different locations around the word since March last year. However, the testing has stopped due to some internal reasons,’’ said one Samsung source, asking not be identified.
The company had been testing the potential drug material with scientists in 16 countries, including Britain, Spain, Czech Republic, Canada, Brazil, South Africa and Taiwan aside of Korea.
It appears that Samsung is being forced to redo the tests from scratch due to changes in safety requirements in Europe and the United States.
The U.S. in particular has recently announced new guidelines for the research of biopharmaceuticals, or medical drugs produced using biotechnology.
The Samsung source, who is close to the projects, said that the company is in talks with the U.S. Food and Drug Administration to reset the conditions for the SAIT101 clinical tests.
``We had vowed to get quicker approval in Europe, so this will definitely put us behind our original schedule. There was also a need to better prepare for testing in the U.S. which is even a larger market. We will eventually be fine,’’ he said.
Samsung plans to invest more than $2 billion by 2020 in the area of biotechnology and advanced pharmaceuticals, a market it calls as ``bio-similar,’’ which it believes will eventually grow to complement its main cash cows of mobile phones, consumer electronics, semiconductors and flat screens.
Samsung Electronics Chairman Lee Kun-hee has been vocal about the company carving a position in biopharmaceuticals, which he believes would be a good fit for Samsung’s traditional business model based on manufacturing prowess and brute strength.
The global market for biopharmaceuticals is seen currently at around $30 billion and expected to maintain annual growth rate of over 50 percent during 2010-15 period.
The market will be propelled by upcoming patent expiries of leading biologics and a financial crisis coupled with increasing health care costs that has required systems in almost all developed countries to look for low-cost alternatives, Samsung officials said.