Dive Brief:

  • Samsung Biologics has agreed to a $331 million manufacturing deal with AstraZeneca, as the British drugmaker ramps up its drug business in the Asia region.
  • The agreement covers large-scale commercial drug substance manufacturing at Samsung’s “Plant 3” as well as drug product used to make biologic medicines. The deal’s value could eventually be boosted to $546 million, the South Korean company said in a statement.
  • AstraZeneca already draws a sizable share of its global revenue from Asia, particularly China. The company has poured even more resources into the region in response, tapping into research for future drugs and now bolstering its supply capacity there.

Dive Insight:

After weathering competition for once top-selling products such as Crestor and Nexium, AstraZeneca has set its sights on a new batch of medicines and a group of markets with growth potential. Investors have rewarded the moves: the company’s shares have climbed about 50% since the beginning of 2019.

Asia is a big part of AstraZeneca’s plan for the future, with China proving to be a particularly larger market. Last year, sales in China jumped 29% to $4.9 billion and accounted for more than a fifth of the company’s product revenue.

To build on its success in China, AstraZeneca last year outlined plans to open a global research and development center in Shanghai and double research positions to 1,000, aiming to develop drugs for diseases that are particularly prevalent in the country and collaborate with Chinese startups. It also licensed three oncology projects to China-based biotechs and created an investment fund with a Chinese bank.

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Those initiatives have come amid renewed interest from drugmakers in China, thanks to government reforms that have lowered some important hurdles for foreign companies aiming to to win clearances for their medicines in the world’s second-largest pharmaceutical market.

AstraZeneca is continuing its push by aligning itself with Samsung Biologics, a logical partner to help expand manufacturing in Asia. The Incheon, South Korea-based company has been investing heavily in biologics, including a $2 billion effort announced in August that envisions a fourth factory dubbed a “Super Plant.”

The company claims it has the largest capacity at a single site, the fastest throughput and a “flawless regulatory approvals record.” In the first half of this year, orders topped 1.8 trillion Korean won ($1.5 billion), more than double the revenue for all of last year, Samsung Biologics said in August.



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