A view of the Songdo Bio Cluster (Photo courtesy of the Incheon Free Economic Zone Authority)
SEOUL, Dec. 26 (Korea Bizwire) — South Korea’s two leading biosimilar makers, Celltrion and Samsung Bioepis, are converging in global scale but diverging sharply in how they produce and sell their medicines, according to a new industry analysis released this week.
A report by Korea Ratings said the contrasting strategies have become a defining feature of competition in the fast-growing biosimilar market, even as both companies expand their global footprints and move toward next-generation drugs.
As of June, the two firms together held 18 of the 75 biosimilars approved by the U.S. Food and Drug Administration, underscoring their growing influence in the United States and Europe.
Celltrion reported roughly 3 trillion won ($2.3 billion) in biosimilar revenue last year, about twice the sales of Samsung Bioepis. Both companies have continued to launch products in Western markets while accelerating efforts to develop new biosimilars and, increasingly, original drugs as future growth engines.
This undated file photo provided by Celltrion Inc. shows one of its three plants in Songdo, about 40 kilometers west of Seoul. (Yonhap)
The report found that their most significant differences lie in sales and manufacturing models. Celltrion relies on a direct-sales strategy in major markets, operating its own distribution networks to manage pricing, bidding and brand building.
That approach allows for faster and more aggressive responses to market conditions, but it also brings higher operating costs and greater working-capital burdens tied to inventory and global sales infrastructure.
Samsung Bioepis, by contrast, sells most of its products through global partners such as Biogen, Organon, Harrow and Teva. The partnership model lowers marketing and distribution costs and enables quicker market entry, but limits the company’s control over pricing and branding and reduces the share of profits it can retain.
The image shows Samsung Bioepis headquarters in Songdo, Incheon (Image courtesy of Samsung Bioepis)
Instead, Samsung Bioepis supplements sales revenue with milestone payments tied to product approvals and launches, which boosted its revenue last year.
The two companies also differ fundamentally in production. Celltrion has vertically integrated its operations, spanning research, manufacturing and sales. It operates large-scale production facilities in Songdo and is expanding finished-drug capacity, while also moving to acquire additional manufacturing assets in the United States.
This structure gives Celltrion greater control over supply, quality and costs, but requires heavy capital spending and careful capacity management.
Samsung Bioepis does not own manufacturing plants, outsourcing production to contract manufacturers, including Samsung Biologics. That asset-light model offers flexibility and lower capital expenditures, but limits cost control and places the company in competition with other clients for manufacturing priority.
As competition intensifies globally, the report said future success will hinge on how well each company balances pricing, production efficiency, patent litigation strategy and distribution strength, while continuing to expand and refine its product portfolio.
Ashley Song (ashley@koreabizwire.com)
