Btobioinnovation.com
Author: Jean-Claude Muller, 穆卓Executive Editor at BtoBioInnovation jcm9144@gmail.com
SPECIAL REPORT #22
Will South Korea become the world leading hub of biologics production?
On May 16, Celltrion Chairman Seo Jung-jin announced that the Songdo (South Korea) based company will invest 40 trillion won ($33.6 billion) and create 110,000 jobs by 2030 to build a bioindustrial valley and establish itself as a global leader in healthcare logistics. Celltrion had previously indicated that it aims to reach sales of 30 trillion won ($25.2 billion) in 2027.
The Korea Herald, the major national media, reported details from the press conference indicating that Celltrion will spend some $13.5 billion to secure access to novel drugs, $4.1 billion to expand its biologics site in Songdo, in order to produce up to 1 million liters of biopharma ingredients annually and up to 100 million vials of final products, and $4 billion for its global logistics network and support funds. The remaining $10 billion would be injected to operate a pipeline of 50 drugs. In addition, Chairman Seo Jung-jin said he will invest about $835 million to expand several small molecule plants in order to produce and deliver 10 billion tablets annually and to immediately add 10,000 employees: 2,000 scientists and experts and 8,000 workers for the expanded plans. Celltrion intends to develop 20 second-generation biosimilars including immuno-oncology treatments.
The task may not be as easy as announced. Celltrion has already launched a biosimilar of Roche’s cancer drug Rituxan in the US, but the conglomerate had to deal with a US FDA warning letter for non-compliance for its Incheon site which produces Rituxan biosimilar and consequently it had put Teva’s new migraine drug Ajovy launch at risk. Issues have been solved and both products were approved and launched in the US. Celltrion currently partners with Pfizer’s Hospira and Teva.
The Celltrion strategic plan has close similarities with those announced last August by its main national competitor namely Samsung BioLogics, a well established CDMO in South Korea. At the time Samsung BioLogics said it will invest up to $22 billion across various business lines in the next ten years, including production of biopharmaceuticals, combined with auto electronics and artificial/augmented intelligence. Although Samsung Biologics has not outlined a plan as precise as Celltrion, it is now clear that the South Korean giant has reached its objective, decided fifteen years ago, in extending its existing chemical business in a viable biosimilar business. In 2008, Samsung BioLogics had clearly outlined to us that it wanted to become the top biologics contract manufacturer in the world and to exceed Lonza’s capabilities ten years later. Samsung BioLogics has since invested $2.6 billion into three drug-producing plants in Songdo, a new technology center in Incheo, a growing city close to Seoul International Airport, and created a manufacturing operation with a capacity of 362,000 liters. The company has become a major contract organization and has an ongoing joint venture with Biogen to develop various biosimilars.
To the best of your knowledge there is no other place in the world with similar investments to produce and structure a global healthcare logistics network for biologics. Both companies have announced capabilities to directly sell their products in Europe in 2019, in Asia and South America by 2020 and the US and Canada in 2021.
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