Samsung, SK in race to gain lead in CDMO market
Samsung Biologics and SK Bioscience plan to invest heavily in the contract development manufacturing organization (CDMO) market, which the two firms believe will be their next growth engine.
CDMO, which combines contract manufacturing organization (CMO) and contract development organization (CDO), refers to the development and production of medicine at the request of a client company that lacks or does not have any medical production facilities.
Samsung and SK have already demonstrated their global competitiveness last year by achieving record-high business performance after inking major COVID-19 vaccine production deals.
This year, the two companies are planning even more aggressive investments in the CDMO field.
Samsung Biologics is preparing to open its fourth factory in Songdo, Incheon, which will be the world’s largest production facility for bio products. SK Bioscience will strengthen its competitiveness in the CDMO market by establishing a research and development center in Songdo in 2024.
Bio firms have recently expanded their CDMO capacity, because the global market size is growing at a fast rate and it has become essential to strengthen their production capabilities.
According to a study by the Korea Biotechnology Industry Organization revealed on May 1, the size of the global CDMO market will reach $20.3 billion (25.1 trillion won) by 2026 from $11.3 billion in 2020.
As of 2020, there were more than 100 CDMO companies and the top five companies include Lonza, Samsung Biologics, Catalent, Boehringer Ingelheim and Thermo Fisher, which account for 59.4 percent of the total market.
Samsung Biologics is the No.1 player in the domestic CDMO market. Last year, it achieved 1.56 trillion won in sales and 537.3 billion won in operating profit, which were record-high numbers owing to the production of COVID-19 vaccines developed by Moderna.
Samsung built its first CDMO factory in Songdo in 2011 and currently runs three. A new fourth production facility will manufacture 256,000 liters of medicine annually, which is the largest output capacity in the world for a single plant.
“We will begin construction of a fifth plant by the end of this year. We will be focusing on expanding our production capacity by establishing a mass production facility for antibody drugs and an Open Innovation Center in Songdo,” a Samsung Biologics official said.