SONGDO, Incheon -- At the Samsung BioLogics headquarters based in Songdo, Incheon, a set of conference rooms have taken on a rather unconventional naming scheme.

The first room begins with Songdo, continuing on to South Korea and Asia, and out to the world’s five oceans and six continents. What follows? The highest peaks located on each continent such as Mount Everest in Asia and North America’s Mount McKinley.

“It reflects the company’s aim to expand globally and to leave a noteworthy footprint on each continent in the years to come,” explains Yoon Ho-yeol, vice president of Samsung BioLogics’ corporate business operations.
  

At the center of Samsung Group’s recent push to expand into new, promising industries beyond its flagship electronics business, Samsung BioLogics -- a contract manufacturer of biologic drugs developed by global pharmaceutical companies -- hopes to become the world’s No. 1 biopharmaceutical contract manufacturing organization, or CMO.

Biologics are complex drugs based on living cells genetically engineered using recombinant DNA technology. Offering heightened safety and efficacy, they have a huge demand -- seven of the world’s 10 best-selling drugs are biologics -- despite the high costs.

For major biopharma firms today, “the biggest challenge has been simply making enough products to sell,” according to a McKinsey report in December 2014. This is precisely why the South Korean electronics giant has chosen to jump into this lucrative business from the position of where it excels -- manufacturing.

“Our foremost goal at this point is to rise as a solid leader in the biopharma CMO segment. By 2020, one in every 10 biologic drugs in the world will be made here in Songdo. It’s inevitable,” Yoon said.

Led by experienced global executives and a notably young workforce -- the average employee age is 29 -- Samsung’s biopharma CMO founded in 2011 operates similarly to a fast-growing start-up, except that it is powered by Samsung’s massive investments and exclusive manufacturing and operational expertise.

Over the past four years, Samsung BioLogics has managed to build -- faster than any of its competitors -- two high-tech biologics manufacturing plants boasting a combined production capacity of 180,000 liters, the third largest in the world.

Upon receiving approval from the U.S. Food and Drug Agency and the European Medicines Agency, the first plant is geared to begin operations early next year, manufacturing commercial biologics developed by its two current partners Bristol-Myers Squibbs and Roche. 

The second plant will begin test operations starting from the first quarter of 2016 and start commercial production after clearing verification and validation procedures with its clients, which may take 2-3 years, and passing subsequent inspections by the FDA and EMA, according to Samsung BioLogics spokesperson Park Chang-sik.

For the next 10 years, Samsung will produce three biologic drugs -- two from BMS and one from Roche -- which will take up 100 percent of the first plant's operating capacity and 70 percent of the second plant's output, according to the manufacturer.


“Our clients are amazed at how quickly we’ve started as well as the quality of our products, while competitors are afraid of how fast we’ve emerged and our potential to outperform them,” said Michael Garvey, senior director of the cell culture division.

Eyeing forthcoming partnerships, Samsung will begin constructing its third plant this month. Upon its completion, Samsung BioLogics said its total production capacity will reach 400,000 liters, paving the way for the firm to rise up as the largest biopharma CMO in the world.

Samsung’s ‘youngest,’ most global affiliate

Samsung BioLogics’ drive toward international expansion at best reflects its founding values -- a company "born with a global DNA from birth, rather than one that seeks gradual globalization over time,” as Yoon put it.

A foremost priority of Samsung BioLogics CEO Kim Tae-han was to build up a workforce experienced in and tailored to a global working environment, as its clientele consists of global pharmaceutical companies based in the United States and Europe.

Eight out of the company’s 13 executives are expatriate veterans of Western pharmaceutical companies, with years of field experience in global biopharmaceutical business management including manufacturing, quality control, engineering and operations.

Around 70 percent of its senior-level employees have worked at global pharmaceutical firms, and the company makes efforts to maintain around 10 percent of its total workforce with foreign employees as it grows.

These global executives have played a key part in not only pioneering Samsung’s foray into the field of biologics production, but also in building up a global business structure combining Korean corporate strengths with Western business standards.


“We are in Korea and it’s a Korean company, but we try to be aware of the international business environment and include it as part of the work culture,” said Garvey, who joined Samsung in 2012 after working for around 15 years at global pharmaceutical companies Sanofi and Genentech.

“Essentially, the company sought to integrate global standards with Korean business practices in building up its corporate system,” he said.”

For one, English is the primary language of communication, documentation and administration at Samsung BioLogics, considering that most of the company’s operations are global. Given the nature of the work, many of the employees come from an international background.

“I’d say around 95 percent of my tasks are in English,” said Kim Tae-jin, an associate at the firm’s project management team. “In my case, I often have to conduct meetings early in the morning or late in the evening, due to the time difference with our global clients.”

As a young company paving its way forward into a newly emerging industry, Samsung BioLogics is “young” in another sense, as the average employee age is 29 while 80 percent of some 1,000 employees hold associate-level positions.

“They’re very eager to learn and try different things,” said Garvey. “There is an ownership understanding (among employees) that we’re an emerging industry, and a willingness to work longer and smarter without having to convince them.”

“Given the firm is very young and growing fast, there is a lot of responsibility weighed on each employee. Though difficult at times, I believe we are presented here with opportunities unavailable elsewhere,” said Kim, who has worked at the company for a year.

By Sohn Ji-young (jys@heraldcorp.com)