[Edaily Reporter NA EUN-KYUNG ] SAMSUNG BIOLOGICS(207940)expressed confidence that its order intake, which remained at around $400 million in the first half of this year, will rebound significantly in the second half. This is not merely based on optimism. The company believes that both second-half earnings and order intake will improve as several factors converge simultaneously: the start of operations at the Rockville, Maryland, plant; the inclusion of revenue from Plant No. 5; and negotiations for long-term supply contracts with major global pharmaceutical companies.

Rockville’s 4th-Quarter Revenue ‘Excluded’… Conservative Guidance Presented

According to the SAMSUNG BIOLOGICS second-quarter earnings conference call held on the 23rd, the company did not include the Rockville plant’s fourth-quarter revenue contribution in its current annual revenue growth guidance of 15–20%. Yoo Seung-ho, Head of the Management Support Center (Executive Vice President) at SAMSUNG BIOLOGICS, stated, “The current guidance reflects only the volume produced in the second quarter and recognized as revenue in the third quarter.” He added, “We may adjust the guidance for the next quarter if necessary after reviewing third-quarter production results and exchange rates. “As the scale of revenue contribution from the Rockville plant’s third-quarter production is gradually confirmed, we will provide a separate update once this information is finalized,” he added.

This is interpreted to mean that SAMSUNG BIOLOGICS has presented a relatively conservative outlook for this year’s performance. In the biopharmaceutical CDMO business, revenue is recognized only after production is completed, followed by quality verification by the client and product shipment, resulting in a time lag between production and revenue recognition. Since exchange rates and client approval schedules are also variables, SAMSUNG BIOLOGICS has historically revised its annual guidance to reflect quarterly performance trends. Vice President Yoo explained, “Since the Rockville plant began full-scale operations following its acquisition at the end of March, we determined it would be reasonable to sequentially finalize the scale of its revenue contribution while monitoring actual quarterly operating performance.”

In particular, the company forecasts that the Rockville plant will generate over 100 billion won in revenue per quarter starting in the second half of this year. Since the current guidance reflects only the portion recognized in the third quarter, there is a possibility that annual earnings could exceed the current forecast if fourth-quarter revenue is added as expected.

The acquisition of Rockville holds significance for SAMSUNG BIOLOGICS beyond a simple expansion of production capacity. By securing a local production facility in the U.S., the company is now able to respond to global pharmaceutical companies’ demand for supply chain diversification, and it is assessed to have secured a favorable position regarding the U.S. government’s policies to promote biomanufacturing and the trend toward preferring local production. While the Incheon plant handles large-scale commercial production, Rockville will serve as a strategic hub to expand engagement with U.S. customers.

Plant 5 is also expected to support improved performance in the second half of the year. Completed last year, Plant 5 will begin contributing to revenue in earnest starting in the third quarter, following the production of certification batches. With Plants 1 through 4 maintaining high utilization rates, growth is expected to accelerate as both Rockville and Plant 5 contribute to revenue simultaneously.

The company is also moving forward with the development of Plant 6 and the Third Bio Campus to expand production capacity. SAMSUNG BIOLOGICS is preparing to break ground on Plant 6 within this year, and plans to build production facilities at the Third Campus that will differentiate it from the first and second campuses, which currently focus on antibody drugs. Executive Vice President Yoo stated, “We are exploring various directions for the Third Campus, keeping a wide range of next-generation modalities—such as cell and gene therapies, antibody-drug conjugates (ADCs), and peptides—open.”

Orders Plummet in First Half… Conditional Contracts Disclosed Amid Slump

In contrast, new orders in the first half of the year slowed significantly. According to SAMSUNG BIOLOGICS, the value of new orders in the first half of this year, based on regulatory filings, was approximately $402 million (about 570.4 billion won). This represents a significant decrease compared to the cumulative order value for the first half of last year (approximately $2.319 billion, about 3.355 trillion won).

Vice President Yoo explained, “SAMSUNG BIOLOGICS observed a trend of slowing order inquiries from clients as discussions on the Trump administration’s tariff policies gained momentum,” adding, “Considering that SAMSUNG BIOLOGICS’ orders typically lead to final contracts after about 12 months of negotiations, it appears that this impact was reflected in the first-half results with a time lag.”

Amid uncertainty surrounding the Trump administration’s tariff and drug pricing policies, global pharmaceutical companies appear to have postponed signing long-term CDMO contracts in the first half of the year, causing SAMSUNG BIOLOGICS’ new order intake to slow down as well. Contract signings were delayed as a trend spread toward prioritizing companies with investments in U.S. production facilities or local manufacturing capabilities. However, as recent policy directions are becoming clearer, contract discussions are resuming, particularly with CDMOs that have U.S. production bases. In particular, the likelihood of SAMSUNG BIOLOGICS expanding its order intake in the second half of the year is increasing, given its acquisition of the Rockville plant.

Another notable aspect of this earnings announcement is that SAMSUNG BIOLOGICS disclosed the value of its contingent contracts. The company stated that, in addition to its cumulative confirmed contracts totaling $21.7 billion (approximately 31.7 trillion won), the value of its contingent contracts amounts to $24.3 billion (approximately 35.5 trillion won). Since contingent contracts are contingent on the fulfillment of certain conditions—such as successful development or facility approval—they are not immediately included in the order backlog as firm contracts; however, they serve as an indicator of the future order pipeline. It is interpreted that the company disclosed the size of its contingent contracts to more proactively explain to investors that its future order base remains solid, despite the sharp year-over-year decline in new orders during the first half of the year.

While the U.S.’s intensified efforts to curb Chinese biotech are expected to create a favorable environment for SAMSUNG BIOLOGICS in the medium to long term, the impact is likely to be limited for the time being. This is because it is not easy to shift the production volume of existing pharmaceuticals—previously manufactured by Chinese CDMOs—to other companies in the short term. For commercialized pharmaceuticals, the production facilities and processes themselves are included in the approval details; therefore, changing CDMOs requires transferring technology to new production facilities and demonstrating bioequivalence to ensure that the new product is identical in quality and efficacy to the existing one. Subsequently, approval must be obtained from regulatory authorities, such as the U.S. Food and Drug Administration (FDA), for the changed manufacturing site and process. This process requires additional testing, validation, and production stabilization, entailing significant time and costs. For this reason, global pharmaceutical companies are more likely to restructure their supply chains by reducing their reliance on China starting with new pipelines or future long-term supply contracts, rather than immediately shifting existing commercial volumes.

Vice President Yoo also drew a clear line, stating that there has not yet been a noticeable shift of large-scale volumes away from Chinese CDMOs. He stated, “Given that Chinese CDMOs primarily focus on preclinical and early clinical stages, immediate and large-scale volume shifts are not yet prominent,” but added, “As clients are increasingly giving significant consideration to geopolitical risks when signing long-term supply contracts, we anticipate that a favorable environment for non-Chinese CDMOs will emerge in the medium to long term.”

The company believes that as Rockville and Plant No. 5 begin contributing to earnings in the second half of the year, new order intake could also rebound. Vice President Yoo emphasized, “As tariff uncertainties have eased since the start of the second half, inquiries regarding orders from clients are on the rise,” adding, “We are currently discussing long-term supply contracts with numerous global pharmaceutical companies, and many of these are expected to result in actual contract signings by the end of the year.”

Meanwhile, regarding plans to secure additional investment funds following the acquisition of Polypeptide, Vice President Yoo stated, “If future domestic and international investment plans materialize, we plan to prioritize the use of internal cash reserves. Subsequently, we will broadly review various funding options, including bank loans, corporate bond issuances, and rights offerings.”