Biologics are seen as the future medical trend, and are increasingly used in place of chemical treatments. The drugs are grown from cells, requiring a complex manufacturing process, but they’re more effective and more capable of targeting certain diseases than chemical pills. In 2015 six of the world’s 10 best-selling drugs were biologics, including Johnson & Johnson’s drug for arthritis. Globally, the drug industry currently produces 4 million liters of biologic medicines a year, and that’s projected to double by 2030.
Driven by huge profits, Samsung BioLogics is a also contract manufacturer for some pharma giants, including Roche Holding AG and BristolMyers Squibb Co. That business generated $95.4 million in sales in the first quarter.
Drug-makers is now outsourcing to companies such as Samsung BioLogics because of increasing pressure from cutting costs. Meanwhile, Samsung chose to be a Contract Manufacture Organization (CMO), focusing on only part of the producing process instead of the whole, because the development of new drugs would have a high cost, of both money and time. Also, new drugs are probably not that stable. Professional CMO could on one hand reduce the burden of facilities and cost, and on the other take full advantage of Samsung’s experience through their years of precise manufacturing.
However, it has a number of competitors that also are expanding. Switzerland’s Lonza Group and Germany’s Boehringer Ingelheim have long histories in biologics contract manufacturing, and Japan’s Fujifilm Holdings has also entered the business. With its newly constructed plant, Samsung BioLogics is positioning itself to double its share of the market for the manufacturing of biologics and hopes to have half of the contract manufacturing market in the next decade.
In fact, apart from biopharmaceuticals, Samsung is employing the mode of "medical service + biological pharmacy + digital treatment”. In 2016, it reached an agreement with YGRH Hospital to cooperate in aspects including health management, multidisciplinary consultation, and personnel training, which is seen as a significant move into China’s high-end medical market. As for digital treatment, just take a look at “S Health” on your smart phone. After 5 years of ploughing, the project has gradually begun to take shape. These 3 sections are aimed at the high-end forefront of the medical market, though seemingly scattered, actually forming a complete medical health industry chain. More acclaimed, Samsung would be able to apply its previous marketing experience in electronics to its medical unit, thus resulting in mutual promotion.
Just as Kim says, Samsung wants to be a global top player in whatever industry it enters, and by 2030, it would like to be regarded as one of the global leaders in health care.
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