Announcement

Q3 Financial Performance

• 3Q accumulated revenue surpassed KRW 3T for the first time Annual revenue growth guidance raised to +15-20%
*Pre-adjustment: +10-15%

• - Consolidated: Rev. KRW 1,187 B, OP. 339 B (OPM: 28.5%)
• - Separated: Rev. KRW 1,067 B, OP. 445 B (OPM: 41.7%)
• - Bioepis: Rev. KRW 330 B, OP. 68 B (OPM: 20.6%)

CDMO

• • Inked a record-breaking KRW 1.7T deal with Asian pharma, and successfully expanded Top 20 Pharma clients to 17
• • CDO Platform Launch: S-AfuCHOTM, S-OptiChargeTM, S-HiConTM
• • Continued strong orders momentum: USD 14.2 B cum. volume -95 CMO projects, 124 CDO products

Key Highlights

Business Expansion

• • Completion of ADC facility construction targeted for '24
• • P5 Construction fully on track for Apr. '25 operations
• • Continued investment via Life Science Fund
  - Flagship Pioneering Fund VIII
  *Al-based drug development

Biosimilar

• • SB17 (bStelara): Launched in Europe and Korea
  *15 countries incl. Germany, Spain and Netherlands
• • SB12 (bSoliris): Approved by US FDA
• • SB15 (bEylea): Received positive CHMP Opinion
  *Committee for Medicinal products for Human Use (CHMP) of EMA

Today, Samsung Biologics announced our financial results for the third-quarter of 2024.

For the first time in the company's history, and the first in the domestic biopharmaceutical industry, Samsung Biologics exceeded KRW 3 trillion in cumulative consolidated revenue by the third quarter. Separate revenues of Samsung Biologics and Bioepis posted growth rates of 21% and 26% year-over-year, respectively, while consolidated revenue grew by 15% year-over-year to KRW 1.2 trillion, with operating profit of KRW 339 billion. With this outstanding accomplishment, we went one step closer to achieving an annual consolidated revenue of KRW 4 trillion for the first time in the history of Korean biopharmaceutical industry.

In light of this solid growth momentum, we have raised our annual revenue guidance from 10~15% year-over-year growth to 15~20%. This great feat - raising our guidance for two consecutive years stems from our proactive investment activities to address market demands in a timely manner, our strong competitive edge in speed and execution capability, and solid foundation of our CDMO business, all of which have been maximized through our unique Operational Excellence initiatives.

Continuous Growth of CDMO Business Contract Wins Continue, Leveraging Robust Competitiveness

Our CDMO business continued to progress smoothly as always. Contract negotiations with Global Pharma clients, based on strategic partnership, remain ongoing.

We achieved a record-setting USD 3.3 billion in total cumulative orders for this year. We pride ourselves on our robust capabilities and strategic foresight, which have solidified our position as a trusted partner within the global pharmaceutical landscape. We finalized a monumental contract worth KRW 1.7 trillion with a pharmaceutical company based in Asia yesterday, marking the largest deal disclosed in our company's history. We have also succeeded in securing one of the top 20 global pharmaceutical companies as our clients, bringing the total number of the top 20 clients to 17. And having already secured partnerships with 17 of the top 20 global pharmaceutical companies, we are now strategically positioning ourselves to further expand our client base across key regions, with an extended focus on the Japanese market. Our recent participation at BIO Japan underscored our commitment to fostering deeper relationships with local clients, recognizing the critical importance of proximity in facilitating collaboration and trust. As we aim to extend our reach to the top 40 global pharmaceutical companies as our clients, we fully understand that cultivating close, enduring partnerships with our Japanese counterparts will be pivotal in driving sustained growth and innovation. By leveraging our proven expertise, we are poised to meet the evolving needs of the biopharmaceutical industry and create lasting value for our clients.

Meanwhile, we are advancing our CDO business by bolstering our capabilities in delivering tailored solutions and cutting-edge technology platforms. This quarter, we unveiled S-AfuCHOTM, a platform that enables the production of antibodies with enhanced Antibody-dependent Cellular Cytotoxicity (ADCC), and S-OptiChargeTM, a platform that precisely modulates protein charge variants. More recently, we launched S-HiConTM, a high-concentration formulation platform developed to proactively address the growing market demand for the high-dose biopharmaceuticals.

This year, we have launched four new platforms, further elevating our global competitiveness by swiftly and adeptly addressing diverse needs of clients under our new CDO business slogan, 'Agile, Flexible, Focused on You'.

Moreover, our company recently attained over 300 global regulatory approvals, an impressive achievement in just 13 years since our founding. With our outstanding quality standards, we continue to maintain an industry-leading approval rate for regulatory inspections. Regulatory approval is a critical process that is required for the distribution of biopharmaceutical products, as it provides official validation that the overall biopharmaceutical production and management processes met rigorous quality standards. In this regard, this accomplishment reflects our unwavering commitment to quality and business excellence, driven by our efforts in cultivating professional talent, digitalization, and continuous innovation. We will remain committed to maintaining high client satisfaction by leveraging our unparalleled speed, quality, and reliability, while further reinforcing our leading position in the industry.

Proactive Capacity Expansion
Preparation for the Future: Plant 5 and ADC Facility

Plant 5, which is set to be the first facility in our second Bio Campus, is a large-scale, advanced facility with a capacity of 180,000 liters. Construction of the facility is well on track to commence operation by April next year while pre-sales activities for the plant is also actively progressing. To date, 82% of the overall construction has been completed, with progress proceeding smoothly and efficiently thanks to a range of our optimization initiatives.

Our ADC business expansion is also progressing steadily.
The ADC production facility, which includes a 500 liter conjugation reactor and one purification line, will be completed by the end of this year as planned. In addition, we are investing in leading biotechs with ADC technology through Samsung Life Science Fund to strengthen our competitiveness in the ADC area and proactively respond to market demand. We are collaborating with the biotechs to build the toolbox for our ADC CDO service, with an aim to offer a broader range of services to our clients.

Active Investments in New Modalities
Supporting New Drug Development through
the Samsung Life Science Fund

In July, we raised USD 52.2 million (approximately KRW 72 billion)
with Samsung C&T, Samsung Bioepis, and Samsung Venture Investment for the Samsung Life Science Fund II to invest in Flagship Pioneering Fund VIII, a USD 2.6 billion fund that focuses on innovative drug development platforms utilizing artificial intelligence. Through these investments, we intend to support innovative biotechs with cutting-edge technologies and secure priority investment opportunities in promising businesses for additional investments. This strategy represents our commitment to promoting more active investment for novel drug development within the industry, thereby contributing to the advancement of future medicine.

Ongoing Expansion of the Biosimilar Business
Demonstrating Product Competitiveness with Global Market Launches

Samsung Bioepis achieved several notable advancements in the third quarter. In July, Samsung Bioepis received USFDA approval for SB12 (Soliris biosimilar). With this approval, Samsung Bioepis expects to improve treatment accessibility significantly for patients suffering from rare diseases.

Also, in the same month, Samsung Bioepis successfully launched SB17 (Stelara biosimilar) in Europe. With its eighth biosimilar launch in the European market, Samsung Bioepis is poised to fortify its autoimmune treatment portfolio by adding this interleukin inhibitor to its existing portfolio of three existing TNF-a inhibitors.

Moreover, in September, Samsung Bioepis received a positive opinion from the Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency (EMA) for SB15 (Eylea biosimilar). This positive opinion is a crucial step toward receiving product approval from the European Committee (EC), which is typically granted within two to three months following the issuance of such an opinion.

ESG Achievements
Advancing ESG Management through Diverse Challenges and Transformative Changes

This year, Samsung Biologics has undertaken several meaningful efforts to ensure its internal stability while strategically preparing for numerous challenges and transformation in its ESG management.

In January, we were awarded the Platinum medal by EcoVadis in the ESG assessment, the highest distinction available for top 1% companies globally. This is a notable achievement for us as it marks an elevation from last year's Gold rating (granted to top 5% companies).

In May, we issued our fourth ESG report. This year's report is noteworthy for its alignment with the ESG disclosure regulations required by both European and U.S. standards. The report incorporated an enhanced double materiality assessment, which identified 13 critical ESG issues including carbon neutrality, biodiversity, information security, and supply chain management. We also disclosed our targets to reduce on-site greenhouse gas emissions by 32% and supply chain emissions by 36% by 2030, established a strategy aligned with the global TNFD (Taskforce on Nature-related Financial Disclosures) guidelines for the first time, addressing the emerging ESG priority of natural capital.

Furthermore, we became the first Korean CDMO to join the PSCI (Pharmaceutical Supply Chain Initiative) in August, a US-based non-for-profit organization founded in 2013 to advocate for sustainable practices across the biopharmaceutical supply chain. Currently, the membership includes 84 biopharmaceutical companies worldwide, including global big pharmas such as Johnson & Johnson, Pfizer, Novartis, and AstraZeneca. We plan to actively communicate with other PSCI members, through various activities including sharing audit documents with each other, to enhance transparency and external credibility of our ESG efforts and further make advancement in our ESG management initiatives.

As a global leader in the CDMO industry, we are dedicated to proactively and keenly addressing the demands and key issues of the global community. We are also committed to the development of a sustainable society and will persist in our efforts to demonstrate differentiated ESG competitiveness. We kindly ask your continued support and trust as we strive to create greater societal value and advancement in our capacity as a leading CDMO.

Yours Sincerely,
Oct 23, 2024
President & CEO, Samsung Biologics John Rim