Samsung Biologics third-quarter revenue rises 18.5 percent on plant ramp-up

Samsung Biologics said Wednesday its third-quarter revenue rose 18.5 percent from a year earlier to 1.49 trillion won ($1.12 billion), as full operation of its first four plants, the ramp-up of a fifth and the first revenue from a U.S. production site acquired in March lifted sales.

Operating profit edged up 1 percent to 640 billion won ($482 million) from 634 billion won a year earlier.

The company said it would raise its full-year revenue growth guidance to 20 percent from a prior range of 15 to 20 percent, citing full utilization of plants one through four, revenue from certification batches at the fifth plant in the second half and the stabilization of commercial production at Rockville.

Samsung Biologics said its tender offer for Switzerland's PolyPeptide Group drew 87.88 percent of shares, clearing the 66.7 percent minimum condition. The acquisition is valued at about 2.7 trillion won ($2.03 billion), or 1.46 billion Swiss francs, the largest merger and acquisition in Korea's pharmaceutical and biotechnology sector. The company said the deal moves it into peptides alongside antibodies, mRNA and antibody-drug conjugates, diversifying its portfolio and addressing demand for GLP-1 treatments for obesity and diabetes.

"This acquisition is a strategic decision encompassing all three of Samsung Biologics' growth axes — production capacity, business portfolio and global footholds — and will contribute to enhancing corporate and shareholder value," said John Rim, the company's chief executive officer.

To fund the purchase and further expansion, the company is issuing 3 trillion won ($2.26 billion) in new shares. Of that, 2.71 trillion won ($2.04 billion) will go to the PolyPeptide acquisition and 295 billion won ($222 million) to facilities for a second bio campus, where plants six through eight are planned to lift antibody drug production capacity to 1.385 million liters.

The company's balance sheet at the end of September showed assets of 12.7 trillion won ($9.54 billion), equity of 8.69 trillion won ($6.54 billion) and liabilities of 3.98 trillion won ($3 billion), for a debt-to-equity ratio of 45.8 percent and a borrowing ratio of 9.2 percent.

Samsung Biologics runs a contract development and manufacturing business for biologic drugs, with 845,000 liters of capacity across plants one through five in Incheon's Songdo district and Rockville. It has won 117 contract manufacturing and 184 contract development orders since its founding, worth a cumulative $22 billion. In the first half, Europe accounted for 59.3 percent of revenue at 1.53 trillion won, the United States 23.1 percent at 596 billion won, Korea 16.7 percent at 432 billion won and other markets 0.9 percent.