Samsung Biologics, one of the world’s largest contract development and manufacturing organizations (CDMOs), announced its earnings for the second quarter of 2023, including consolidated revenue of KRW 866.2 billion ($670 million) and consolidated operating profit of KRW 253.4 billion ($196.4 million).
“Our consistent delivery of quality service and operational excellence, coupled with our expanded strategic partnerships with top global pharmaceutical companies, have been pivotal in driving stable revenue growth in the second quarter,” said John Rim, Samsung Biologics CEO. “With the full completion of Bio Campus I offering 604,000 liters of capacity and our Bio Campus II expansion with Plant 5 on track to come on line by April 2025, we are well-positioned to meet the growing demands of the market.”
Samsung Biologics has showcased a noteworthy improvement in profitability for both the second quarter and the initial half of the year. The CDMO attributed this robust performance to the complete utilization of its first three plants, which provide an industry-leading biomanufacturing capacity, as well as the broadening of its alliances with major pharmaceutical enterprises. Its diversification into growing areas like mRNA vaccine production and biosimilars also played a role.
The consolidated revenue for Q2 2023 reflected a 33.0% rise compared to Q2 of 2022. Samsung Biologics operating profit grew 49.4% from the same period last year. Net profit, which came in at KRW 184.9 billion, grew by 21.6% year over year. Its earnings before interest, taxes, depreciation, and amortization was KRW 362.1 billion, up 40% from its EBITDA in the second quarter of 2022.
For the first half of 2023, the company reported a consolidated revenue of KRW 1,587.1 btrillion and an operating profit of KRW 445.2 billion.
The company’s consolidated earnings reflect its acquisition of Samsung Bioepis, a biosimilars firm started as a joint venture with Biogen and fully acquired by Samsung Biologics last year.
On a standalone basis Q2 2023 revenue for Samsung Biologics was recorded at KRW 637.2 billion. Its standalone operating profit was KRW 254.1 billion, representing a remarkable 47.8% uptick compared to the same period in 2022.
CDMO Industry Implications and the Future of Samsung Biologics
Looking ahead to the rest of the fiscal year 2023, Samsung Biologics has laid out an ambitious roadmap for continued growth and expansion. This plan is underscored by a determination to meet the surging demand for superior biologics and maintain their commitment to clients and stakeholders.
A central element of this forward-thinking plan is the recent inauguration of Plant 4, the largest facility of its kind worldwide. Revenue stemming from the operations at Plant 4 will be included in the Q3 results, which is anticipated to bolster the company’s performance in subsequent quarters.
In addition to the progress made with Plant 4, the company has its sights set on further expansion. Samsung Biologics announced plans to launch operations at its fifth plant by April 2025. This ambitious target means that Plant 5, as the inaugural facility of the CDMO’s second Bio Campus, will be fast-tracked, with the construction timeline set to be the shortest to date for the completion of its plants. The expeditious construction of facilities has become a hallmark of Samsung Biologics’ approach, which, with the completion of Plant 4, has now established an industry-leading 604,000 liters of capacity in just 12 years of operation.
Once the CDMO’s Plant 5 is up and running, it will significantly increase the company’s production capacity. An additional 180,000 liters will be added, reflecting the firm’s strategic investment in scalable manufacturing capabilities. The addition is meant to enable Samsung Biologics to respond to growing global demand for biopharmaceuticals and maintain a competitive edge in the market.
Further underscoring the 2023 projections, Samsung Biologics has also fortified its business relationships with several leading pharmaceutical companies. Expanded contracts with industry giants like Roche, Pfizer, and Novartis have swelled the sales backlog to over KRW 2 trillion as of July. This surpasses the previous year’s cumulative sales backlog, and it affirms the CDMO’s growing reputation as one of the larger players in the biopharmaceutical industry.
Samsung Biologics’ plans for fiscal year 2023 are not only about expansion and revenue growth, however. The company has been keen to underscore its commitment to sustainability and environmental stewardship. Its third annual ESG report, outlines an ambitious commitment to reduce greenhouse gas emissions to net-zero in its operations, and transition to 100% renewable energy by 2050.
“Samsung Biologics is fully committed to engaging in sustainable business practices for the positive impact it has on our clients, society, and the wider community,” said Rim in the report. “We will continue to leverage our expertise and experience to accelerate the delivery of net-zero healthcare and engage with our suppliers and partners to amplify our collective efforts.”
“Samsung Biologics is engaged in this work because we want to leave the world better than we found it,” he added. “2022 was a foundational year for us, and we are steadfast in our commitment to drive substantial progress and make a more meaningful impact in 2023 and beyond.”