Samsung Biologics logo (Samsung Biologics)

Samsung Biologics said Monday that the company signed a $242 million contract manufacturing deal with Bristol-Myers Squibb subsidiary Swords Laboratories to produce immunotherapy treatments until 2030.

Under the latest contract, Samsung Biologics will produce the flagship immunotherapies of BMS at the company’s fourth plant over the next seven years.

BMS, the world's seventh-largest biopharmaceutical company as of 2022 in terms of its sales, has been a client of Samsung Biologics since the Korean company started its contract manufacturing organization business in 2013.

“Securing the latest deal was possible as Samsung Biologics has proved itself as a reliable contract manufacturer to its global partners, with its large production capacity, fast manufacturing speeds and consistent, high-quality output,” an official from Samsung Biologics said.

Samsung Biologics CEO John Rim's client-centric approach, under which the company has tried to swiftly respond to market demand and customer needs, has also played an important role in successful signings with international pharmaceutical firms, according to the company.

As of September this year, Samsung Biologics is under contract manufacturing deals with 14 of the top 20 global pharmaceutical firms, it added.

Backed by the latest deal with BMS and a series of large-scale agreements with other international pharmaceutical companies like Pfizer and Novartis this year, Samsung Biologics has seen its annual accumulated order value reaching around 2.7 trillion won ($2.3 billion).

Samsung Biologics anticipates that the accumulated value of orders signed this year will hit 3 trillion won. That value could increase further, as contracts are usually in a minimum take or pay format, meaning they can be later expanded upon the clients’ request.

“Samsung Biologics has dispelled concerns over overcapacity issues in the CMO market by signing new contracts recently,” the official said. “A series of large-sized deals made this year for our fourth plant is also giving a positive outlook for our fifth plant that is currently under construction.”

The contract drugmaker started the fourth plant’s operation in June this year. The company has been piling up orders for the plant this year, improving its utilization rate -- although the company has not disclosed the rate in detail.

The company’s fifth plant, with a manufacturing capacity of 180,000 liters, will begin operation after the construction is completed in April 2025. When the operation starts, Samsung Biologics will have a combined manufacturing capacity of 784,000 liters, maintaining the biggest capacity in the world.

Meanwhile, Samsung Biologic anticipates an improved performance in the third quarter this year, as revenue from its fourth plant will be included in its earnings report starting the quarter. Its net profit for the second quarter jumped 21.6 percent on-year to log 184.9 billion won.