Korea's Bio CMO Business - The Past, Present, and Future

LOTTE BIOLOGICS Songdo Bio Campus (Incheon, Korea)

 

Past: The Genesis and Growth of Korea's Bio CMO Industry

The genesis of Korea's biopharmaceutical Contract Manufacturing Organization (CMO) industry began as a strategic pivot from the traditional chemical-based pharmaceutical sector toward high-value biopharmaceuticals. A pivotal moment occurred in 2011 with the establishment of Samsung Biologics . At the time, the global CMO market was largely dominated by a few established players like Switzerland's Lonza and Germany's Boehringer Ingelheim. Samsung Biologics, as a latecomer, pursued an aggressive, large-scale investment strategy, rapidly securing a commanding lead in production capacity. This effort was not just about building facilities; it involved establishing a world-class production system and quality management expertise that met stringent Good Manufacturing Practice (GMP) standards in a remarkably short period.

Around the same time, Celltrion also built its own production facilities to support its biosimilar development, creating another significant pillar of the domestic CMO industry. Celltrion leveraged the technological prowess and manufacturing know-how gained from its biosimilar development to expand into CMO services. The aggressive entry of these two giants, Samsung Biologics and Celltrion, laid the groundwork for the rapid expansion of Korea's bio CMO industry. This era was characterized by a strong focus on market capture through massive production capacity.

Present: Global Leadership and Intensifying Competition

Today, Korea's bio CMO industry is firmly positioned as a global leader. Samsung Biologics, in particular, has consistently expanded its facilities to become the world's largest single-site biomanufacturing facility. As of early 2024, Samsung Biologics' cumulative contract value had reached approximately ₩23 trillion, with a ₩2 trillion contract with a major European pharmaceutical company. The company plans to further increase its capacity to over 1.32 million liters by 2032, starting with the operation of its fifth plant in 2025. This strategy is a direct response to the escalating demand for contract manufacturing driven by the explosive growth of the biopharmaceutical market.

Meanwhile, Celltrion established a dedicated CDMO (Contract Development and Manufacturing Organization) subsidiary in 2024, with the ambitious goal of reaching ₩3 trillion in revenue by 2035. Lotte Biologics also entered the market by acquiring a Bristol Myers Squibb (BMS) plant in the U.S., with plans to invest ₩4.6 trillion by 2030 to become a top-10 global CDMO. Similarly, SK pharmteco has been expanding its global footprint by acquiring facilities in the U.S. and Europe, specializing in cell and gene therapies and microbial-based CMO. This influx of large corporations with substantial capital and technological expertise has created a vibrant and competitive landscape.

Company	Key Business Areas	Key Differentiators
Samsung Biologics	Antibody CMO, CDO, CRO	World's largest single-site capacity, unmatched production scale and speed
Celltrion	Biosimilar development, CMO, CDMO	Expertise from biosimilar development, strategic expansion into CDMO
Lotte Biologics	Antibody CDMO	Market entry via U.S. plant acquisition, securing a global manufacturing base
SK pharmteco	Cell & Gene Therapy (CGT), Microbial CMO	Acquisition of U.S. and European sites, building a strong global network

This competitive environment is not just driving capacity expansion but also fostering a greater focus on technological specialization. Companies are actively diversifying their portfolios beyond traditional antibody drugs to include high-value next-generation biopharmaceuticals like Antibody-Drug Conjugates (ADC) and Cell & Gene Therapies (CGT), aiming to capture these lucrative emerging markets.

Future: Challenges and Opportunities Ahead

The future of Korea's bio CMO industry is promising. The global biopharmaceutical market is expected to continue its growth trajectory, particularly in oncology, with significant expansion projected for the ADC and CGT sectors. To navigate these market shifts, Korean companies are likely to focus on the following strategies:

1. Technological Advancement: The business model will increasingly shift from simple CMO to comprehensive CDMO, integrating development and manufacturing. Providing end-to-end services—from cell line development and process development to analytical services and commercialization—will become a key competitive advantage.

2. Portfolio Diversification: Investments will be directed toward internalizing the production technologies for next-generation drugs, such as RNA, CGT, and ADC. This is crucial for responding flexibly to diverse global market demands and pioneering new sectors.

3. Strengthening Global Networks: Geopolitical risks, such as the U.S. Biosecurity Act, are prompting global pharmaceutical companies to reduce their reliance on Chinese CDMOs. This presents a significant opportunity for Korean firms. Strategies like SK pharmteco’s acquisition of overseas production bases and establishing local subsidiaries to enhance proximity to global clients will become increasingly important.

4. Digital Transformation and AI Integration: The adoption of AI and automation technologies in bioprocessing will be essential for maximizing production efficiency and ensuring consistent quality. Building a predictable production system through data-driven process optimization will be a critical factor for success in the future bio CMO market.

In conclusion, Korea's bio CMO industry has successfully leveraged large-scale investment and capacity expansion to become a global leader. Moving forward, companies that enhance their technological expertise, diversify their portfolios into next-generation therapeutics, and adapt to the changing global landscape will be best positioned to dominate the future market.