As leading contract development and manufacturing organizations (CDMOs) in China and Japan face successive internal and external risks, the competitive landscape of the global market is shaking. The industry analyzed that Samsung Biologics could seize an opportunity by leveraging stability and production capacity amid competitors' crises.
On the 28th, China's WuXi AppTec announced it would sell its contract research organization (CRO) subsidiary "WuXi Clinical" and clinical trial operations firm "WuXi MedKey." In a filing, the company said the move was "to enhance financial flexibility and accelerate the expansion of global capabilities," adding it would "focus on contract research, development, and manufacturing organization (CRDMO) services."
The decision came amid the crisis posed by the U.S. biosecurity bill. On the 10th, the U.S. Senate passed the biosecurity bill as part of an amendment to the National Defense Authorization Act. The bill restricts contracts between certain biotech corporations and the U.S. government, effectively targeting Chinese corporations. When it was introduced last year, it failed to pass Congress due to ambiguous regulatory standards, but this time, if House-Senate reconciliation and the president's signature are completed, it is expected to take effect within the year.
WuXi Group has launched an all-out response in preparation for the biosecurity bill. According to the Bioeconomy Research Center at the Korea Bio Association, by the end of September this year WuXi Biologics spent 800 million won and WuXi AppTec spent more than 1.5 billion won on lobbying. These figures are up 33% and 62%, respectively, from the same period a year earlier. WuXi Group is a top-five corporation with about a 10% share of the global CDMO market, and if its U.S. business is restricted, competitors in Korea and Japan could benefit.
However, Japan's Fujifilm was hit by an unexpected setback. The company recently reported to the Massachusetts attorney general that an incident had exposed personal and health-related information of more than 3,500 people. It is known that various personal data may have been leaked, from basic information such as names, addresses, and dates of birth to Social Security numbers, driver's license numbers, passport/ID numbers, and health insurance information. Fujifilm plans to send notices to affected individuals and offer 24 months of free credit monitoring services.
In the bio sector, classified as a national core strategic industry, a single data breach can go beyond simple personal information infringement to cause a decline in corporate credibility, contract cancellations with clients, and a weakening of national industrial competitiveness. In particular, because the breach occurred in the United States, where technology security is emphasized, some analysts say Fujifilm could face constraints in expanding its push in the U.S. market.
As the largest competitors in Asia face successive crises, industry attention is turning to Samsung Biologics. This is because some clients are likely to shift to Samsung Biologics due to the competitors' setbacks.
An industry official said, "China has been continuously selling off business units in preparation for restrictions on operations in the United States, and this can be seen as a continuation of that," adding, "With the data leak risk at Japan's Fujifilm overlapping, Samsung Bio has seized an opportunity to highlight stability and credibility in the global market."
Samsung Biologics is a leading Asian CDMO competing with China's WuXi and Japan's Fujifilm. According to the U.S. biotech outlet GEN, the global CDMO sales leader last year was Switzerland's Lonza, followed by Thermo Fisher Scientific, Catalent, Samsung Biologics, and China's WuXi Biologics in second through fifth. Japan's Fujifilm ranked seventh.
Since its founding in 2012, Samsung Biologics has accumulated 105 contracts for contract manufacturing organization (CMO) services and 154 for contract development organization (CDO) services, with total aggregates of $20 billion (28.7 trillion won). It has secured the world's largest production capacity at 784,000 liters (L) and plans to expand total capacity to 1,324,000 L by adding three plants at Bio Campus II by 2032.