Samsung Biologics to build 256,000-liter plant 4

Samsung Biologics CEO Kim Tae-han announces the company's plan to build plant No.4 in Incheon, during an online press conference on Tuesday. Courtesy of Samsung Biologics

By Nam Hyun-woo

Samsung Biologics announced its plans to build a 256,000-liter plant in Incheon, which will be the world's largest single plant producing biologic drugs.

“With the new plant No.4, Samsung Biologics will shatter its own record of having the largest biologic plant in the world,” Kim Tae-han, CEO of the contract drug manufacturer, said Tuesday during an online press conference.

“When plant No.4 is completed, our manufacturing complex will have a combined capacity of 650,000 liters, which accounts for 30 percent of the global contract manufacturing facilities. Furthermore, we also have a plan to secure 330,000 square meters of land in Incheon to build another biologics complex in the future.”

Samsung Biologics currently has three plants, and the third one is the largest single drug manufacturing plant in the world with an 180,000-liter capacity.

For plant No. 4, Kim said the company will invest 1.74 trillion won ($1.47 billion), and its construction will begin as early as next month. He expected the new plant will begin commercial operation by the end of 2022.

“During the past decade, the global market for biologic drugs has grown by an average 8 percent every year, and the contract development and manufacturing market showed an average 16 percent growth annually,” Kim said.

“In the wake of COVID-19, many biopharmaceutical firms are increasing their reliance on contract manufacturing organizations to manage risks in their supply chain and stabilize new drug supply. And this results in a paradigm shift in the industry of drug development and manufacturing.”

The announcement came immediately after the U.S. Food and Drug Administration (FDA) granted a priority review on Biogen's application requesting the approval of aducanumab, a treatment candidate of Alzheimer's disease.

If approved, aducanumab will likely be the world's first therapy for the disease, and Samsung Biologics has been widely expected to manufacture the drug in contracts with Biogen of the U.S., given the Korean firm's sizeable manufacturing capacity. Kim and other Samsung Biologics executives also have been dropping hints at the company's production plans for Alzheimer's treatments.

During the press conference, Kim refused to talk about its potential production of aducanumab, but added “Alzheimer's disease treatments will be one of the main growth drivers in the global biologics market” and said the company has decided to build plant No.4 to meet “explosive market attention for treatments for cancer, brain diseases and Alzheimer's.”

Apart from aducanumab, construction of Samsung Biologics' plant No.4 has been widely anticipated. According to SK Securities, Samsung Biologics' plants No.1 and No.2 posted 100 percent operating rates in the first quarter, and the company has already accomplished this year's order target for plant No. 3, winning contracts worth 1.8 trillion won in the first half of this year. The accumulated orders in the first half of this year are six times more than the company's total orders in 2019.

Global biopharmaceutical firms' efforts to develop COVID-19 treatments also appear as one of the reasons spurring Samsung Biologics to make the new investment. Kim said a number of new orders it won recently are COVID-19 treatment candidates, and the contract manufacturing deal with Vir Biotechnology of the U.S. is also for a COVID-19 treatment.

In April, the two companies inked a $362 million manufacturing deal on Vir's COVID-19 treatment candidate, which is the largest contract Samsung Biologics has inked since it went public.

“We would call plant No.4 a super plant, because it can provide seamless services on the whole process of drug development, ranging from cell line development, process development and product manufacturing,” Kim said.

Samsung Biologics said it will hire 1,800 people to operate the new plant and will create an additional 6,400 jobs for the construction, which will help the Korean government's attempts to promote the bio and healthcare industry as an economic growth engine.

“Since its establishment in 2011, Samsung Biologics showcased rapid growth as one of the world's best contract development and manufacturing organizations, based on the support and help from investors, customers and the government,” Kim said. “With the new plant, the company will widen its gap with rivals and help Korea to have its bio industry as an economic driver.”