IBK Securities said on the 23rd that orders are expected to expand as Samsung Biologics acquires Human Genome Sciences (HGS), a U.S. biopharmaceutical manufacturing facility. It kept its investment rating at Buy and its target price at 2.09 million won. The previous trading day's closing price of Samsung Biologics was 1.724 million won.
Jeong I-su, an analyst at IBK Securities, said, "Through the HGS acquisition, the company will secure a total of 60,000 liters of drug substance (DS) production capacity (CAPA) in the United States," and noted, "Biopharmaceuticals from GSK that had been produced at HGS will continue to be supplied to the U.S. market by Samsung Biologics after the acquisition, allowing the company to stably secure additional U.S. volume from its existing client GSK."
Earlier, Samsung Biologics signed a deal to acquire the U.S. biopharmaceutical manufacturing facility Human Genome Sciences from GSK for about 413.6 billion won. Jeong projected the acquisition will be completed within the first quarter of next year and reflected in consolidation from the second quarter. Jeong expected sales to increase by about 10% or more due to the CAPA expansion.
Changes in the policy environment were also cited as a positive factor. The explanation was that the Donald Trump administration signed the National Defense Authorization Act (NDAA), which includes the Biosecure Act, making related policies a reality. Jeong said, "Once the bill takes effect, Chinese CDMO corporations are highly likely to be excluded from global pharmaceutical supply chains," and projected, "Coupled with supply chain diversification strategies, this will serve as momentum for a large expansion in CDMO orders."
Specifically, Jeong estimated WuXi Biologics' U.S. sales in 2024 at about 2 trillion won and analyzed that Samsung Biologics could emerge as an alternative supplier for that volume.
Jeong added, "As Samsung Biologics is also considering new capacity expansion investments in the United States, the trend of expanding U.S. CAPA will continue in the mid to long term," and said, "Such structural changes will be a factor that raises the growth premium for the company."