Samsung Biologics' $660 million new order sparks a fierce battle in the CDMO market for biopharmaceuticals.

The window of opportunity for Chinese biopharmaceutical CXOs may only be five years.

Samsung Biologics Signs Another Major Deal, Reaching $4 Billion in Contracts This Year

Following a $1.24 billion mega-deal with an Asian pharmaceutical company in October, Samsung Biologics has recently signed a series of production agreements with an unnamed European pharmaceutical company. The total value of these agreements is $668 million, and Samsung Biologics will provide CDMO (Contract Development and Manufacturing Organization) services to this client through 2031. With this latest deal, the company’s total contract value for the year has exceeded $4 billion.

In recent months, Samsung Biologics has frequently disclosed high-value contracts with unnamed clients.

• On October 22, the company announced a $1.24 billion production agreement with an Asian pharmaceutical company, marking the largest single-client contract to date. This was the second Asian multinational corporation (MNC) to sign with Samsung Biologics this year.
• On September 13, Samsung Biologics announced that it had signed a pharmaceutical contract manufacturing (CMO) agreement worth 119.1 billion KRW ($90.5 million) with another Asian pharmaceutical company. The contract amount represents 3.22% of Samsung Biologics' sales revenue from the previous year. This order significantly increased in value compared to their prior collaboration and involves an undisclosed client.

After securing a series of high-value transactions this year, Samsung Biologics is steadily expanding its influence in the pharmaceutical industry. The company has now partnered with 17 of the world’s top 20 pharmaceutical companies, up from 16 earlier this year, according to its semi-annual report. To meet growing market demand, Samsung Biologics also plans to launch Antibody-Drug Conjugate (ADC) services, including process development and conjugation. (This puts it in competition with companies like WuXi Biologics, though Samsung's primary strength remains in manufacturing.)

Samsung Biologics reported a 15% year-on-year revenue increase in Q3, reaching 1.2 trillion KRW (approximately $857 million). Amid rising tensions in U.S.-China relations, major pharmaceutical firms in Europe, the U.S., and Japan have increased collaboration with Samsung Biologics. Leveraging its potentially industry-leading manufacturing capacity, the company is reshaping the global biopharmaceutical CDMO market, challenging established players like Lonza and WuXi Biologics.

This latest deal further solidifies Samsung Biologics’ market position in Europe, where the region has historically contributed 60%-70% of its revenue.

The New Battlefield for CXOs: A Fierce Competition in Biopharmaceutical Supply

Samsung Biologics is making significant strides in the biopharmaceutical CDMO (Contract Development and Manufacturing Organization) sector. This poses a direct challenge to Lonza, as the two companies have overlapping business focuses and revenue streams tied to major clients.

Samsung Biologics derives nearly 70% of its revenue from the European market and has established a strong position in antibody drug manufacturing. Lonza, meanwhile, is also intensifying its focus on Europe and North America. In 2023, Lonza reported CHF 6.717 billion in revenue, a 10.9% growth, with 57% of its income coming from biopharmaceuticals (primarily antibodies), which grew 17.6% year-on-year. Lonza's top 10 clients account for 52% of its revenue, mirroring Samsung Biologics’ reliance on a concentrated client base.

The competition in antibody drug production is intensifying, with key players in Korea and Europe actively expanding capacity:

• Samsung Biologics is poised to become the global leader in potential manufacturing capacity.
• Lonza, not to be outdone, acquired Roche’s biopharmaceutical plant for $1.2 billion and plans to invest an additional $560 million to upgrade it. This facility specializes in producing biologics like Actemra, MabThera/Rituxan, Ocrevus, Perjeta, and Phesgo, excelling in large-scale manufacturing.

While Korean and Western CDMOs dominate the biopharmaceutical manufacturing (M) segment, Chinese CDMOs, apart from WuXi Biologics, are still in the growth phase. However, geopolitical factors have accelerated their push into European markets. By collaborating with early-stage biotech firms, Chinese CDMOs are securing future orders, leveraging their expertise in the development phase (R&D).

Key developments include:

• In November this year, WuXi Biologics announced plans to expand its Leverkusen site in Germany by constructing a new isolator filling line for pre-filled syringes, a common packaging format for biologics. This expansion aims to optimize the site’s production layout and provide more efficient solutions for multi-product CRDMO services. The new production line will support various syringe sizes (1 mL, 2.25 mL, and 3 mL) and achieve a maximum filling speed of 400 units per minute, with an annual production capacity exceeding 17 million syringes. Currently, the Leverkusen site already operates an aseptic filling and lyophilized formulation production line with an annual capacity of 10 million vials. The expansion will enhance the site’s flexibility in serving the diverse needs of global clients. Construction of the new line is expected to begin soon, with GMP compliance projected to be achieved by 2026.

• In August, Asymchem’s Sandwich (UK) R&D and manufacturing facility commenced operations, marking the official launch of the company’s first European R&D and production base. The site offers comprehensive CDMO services for small-molecule drugs. Looking ahead, the facility plans to expand into emerging fields such as peptides and nucleic acids. It will also adopt advanced green manufacturing technologies, including continuous reaction and synthetic biology, to enable efficient drug development and production across more domains.

These initiatives by leading companies highlight how Chinese CDMO enterprises are actively expanding into the European market. This strategy aims to capitalize on European market opportunities while mitigating global business risks. Additionally, emerging companies are intensifying their efforts to establish a presence in Europe.

• In March, Chinese large-molecule CDMO firm Dinkon Biopharma secured a new order from French company Domain Therapeutics. The project involves DT-7012, a candidate monoclonal antibody (mAb) targeting CCR8 to clear regulatory T cells (Tregs). Dinkon will provide end-to-end services, from cell line development to clinical GMP production. For Domain Therapeutics, this represents its first biologics project.
• Compared to other CDMOs, Dinkon stands out due to its strong technical expertise as one of China’s earliest companies engaged in biosimilars. It has its own proprietary cell line system and surpasses European competitors in both technical capabilities and response times. In 2023, Dinkon also signed project collaboration agreements with two South Korean companies, Panolos Bioscience and Kings Pharm, and more recently with MedPacto. Under these agreements, Dinkon will advance CMC (Chemistry, Manufacturing, and Controls) development for several preclinical candidates, ensuring their smooth progression to clinical trials.

These achievements mark significant progress in Dinkon’s global expansion. However, the company believes that Europe remains the most promising market for its future growth.

• In addition, Pharmaron has long established CGT (cell and gene therapy) R&D bases in Europe and North America. Porton Pharma Solutions has launched its R&D and manufacturing facility in Slovenia. Its subsidiary, Porton Biopharma, not only plans to invest over 1 billion RMB in ADC production capacity but also builds CRO and CDMO platforms for plasmids, viral vectors, cell therapy, gene therapy, and nucleic acid therapeutics. In the booming fields of peptides and antibody-drug conjugates (ADC), a number of domestic CDMOs have risen to prominence, fostering potential end-to-end CRDMO giants like WuXi XDC.

It should be noted that the overseas expansion of Chinese CXO companies in the biopharmaceutical sector needs to accelerate. Traditional strengths of companies like Pharmaron, Asymchem, and Porton lie in small-molecule CDMO services, but their biopharmaceutical businesses still require further development and market expansion, along with localization of overseas services.

Currently, with Europe as the focal market for many companies, the battle for dominance in biopharmaceutical supply has already begun.

Industry insiders point out that Chinese companies’ advantages lie in low costs, extensive experience, and the vast domestic market in China. However, competitors include not only Korean and European companies but also Indian enterprises. Indian companies now have financial resources, greater language familiarity, and a better understanding of GMP and overseas regulatory standards. What they currently lack are talent and experience. "In another five years, India could become a strong competitor in the biopharmaceutical field." Chinese biopharmaceutical CXOs should seize this window of opportunity to accelerate their development and expansion.