[Edaily Reporter Minji Son ] While the biotech industry is experiencing an overall slowdown in investment and a funding crunch, forecasts suggest that contract manufacturing organizations (CMOs) and contract development and manufacturing organizations (CDMOs)—which are expected to benefit from the weak won—as well as biosimilar companies responding to the expiration of patents on global blockbuster drugs are likely to continue their relatively strong growth momentum.

High Exchange Rate Boosts Expectations for CMO and CDMO Performance

According to recent reports from the biotech industry, export-oriented CMO and CDMO companies with global pharmaceutical firms as clients are likely to benefit from exchange rate effects in the short term. This is because a weaker won—which drives up the won-dollar exchange rate—can improve the won-denominated earnings of companies that generate revenue in dollars. In particular, since domestic companies serving global pharmaceutical firms recognize a significant portion of their revenue in foreign currency, the current exchange rate environment could have a positive impact on their short-term performance.

In South Korea, Samsung Biologics, ST Pharm, and Lotte Biologics are considered leading global contract manufacturing organizations. Samsung Biologics handles the development and production of products for global pharmaceutical companies, with a focus on antibody drugs. In its recent second-quarter earnings report, the company recorded quarterly revenue of 1.3209 trillion won—a record high—and operating profit of 586.4 billion won—the highest ever for a second quarter—driven by the full operation of its Songdo Plants 1–4 and favorable exchange rates.

ST Pharm specializes in the oligonucleotide CDMO business and operates an integrated production system spanning from raw materials to oligonucleotides. Lotte Biologics is expanding its CDMO business for antibody drugs and antibody-drug conjugates (ADCs) based at its Syracuse BioCampus in the United States. The Syracuse campus has a production capacity of 40,000 liters for antibody bulk solution, and the company plans to construct a new 120,000-liter production facility in Songdo, Incheon, which is scheduled to begin operations next year.

However, some analysts note that it is difficult to conclude that the rise in the exchange rate will directly lead to an increase in operating profit. A bioindustry official stated, “Foreign currency expenses—such as costs for raw materials, equipment procurement, and overseas subsidiary operating expenses—may also increase, and the extent to which this affects earnings may vary depending on whether foreign exchange hedging contracts are in place and the timing of actual payments,” adding, “It is appropriate to view exchange rates as a factor that complements key performance variables such as the order backlog and plant utilization.”

2027–2030 Patent Cliff… Expansion of the Biosimilar Market

In the medium to long term, biosimilar companies are considered a promising sector. This is because the global pharmaceutical industry is expected to face the so-called “patent cliff” from 2027 to 2030. As blockbuster biopharmaceuticals—with annual sales in the tens of trillions of won—successively lose their patents or market exclusivity, the biosimilar market is also projected to expand rapidly.

In South Korea, Celltrion and Samsung Bioepis are expanding their portfolios of products in the commercialization phase, while Dong-A ST and Prestige BioPharma are also pursuing approvals or follow-on development for certain products.

Products where competition has already begun include Stelara, Eylea, Prolia, and Xgeva. In the Stelara biosimilar market, Samsung Bioepis’s Pizchiva (SB17), Celltrion’s Stekima (CT-P43), and Imuldos (DMB-3115), developed by Dong-A ST, are competing. Prestige BioPharma also has a Stelara biosimilar, IDC2401, but it is still in the candidate screening phase.

Notable Eylea biosimilars include Samsung Bioepis’s Opuvis (SB15) and Celltrion’s Idenzelt (CT-P42). Both companies have secured approvals in major markets such as the U.S. and Europe, laying the groundwork for commercialization.

While the osteoporosis treatment Prolia and Xgeva—used to prevent skeletal complications in cancer patients—both contain the same active ingredient, denosumab, they differ in dosage and indications. Celltrion has developed “Stovoclo,” a biosimilar of Prolia, and “Osenvelt,” a biosimilar of Xgeva, and has begun seeking approval and sales in major markets. Samsung Bioepis has also secured approval for biosimilars of Prolia and Xgeva based on SB16. Prestige BioPharma’s PBP1601 is reportedly in the stage of preparing an Investigational New Drug (IND) application.

The product drawing the most attention going forward is Merck (MSD)’s immuno-oncology drug Keytruda. Keytruda is a global blockbuster drug used to treat numerous types of cancer, including lung cancer, melanoma, stomach cancer, and cervical cancer. In the U.S., biosimilar competition is expected to begin in late 2028, while the end of market exclusivity in Europe is projected to occur around 2031.

In South Korea, Celltrion is developing CT-P51, and Samsung Bioepis is developing SB27. Celltrion is conducting a global Phase 3 clinical trial for CT-P51, while Samsung Bioepis is verifying the equivalence of SB27 to the originator drug through Phase 1 and 3 clinical trials. Prestige BioPharma is preparing to submit an investigational new drug application (IND) for PBP2102.

Follow-on blockbuster drugs are also in the pipeline. Following Keytruda, Opdivo, Darzalex, and Coscentix are among the next products expected to face patent expirations.

BMS’s immuno-oncology drug Opdivo is expected to lose its market exclusivity in the U.S. in 2028 and in Europe around 2030. Prestige BioPharma is developing PBP2101, a biosimilar of Opdivo, but it is still in the early stages of development.

Dazalex, a treatment for multiple myeloma, is expected to enter the open market when its substance patent expires in 2029 in the U.S. and 2031 in Europe. Celltrion is currently conducting a global Phase 3 clinical trial for CT-P44, a dasalex biosimilar. The company is positioning CT-P44, along with its Keytruda biosimilar, as a key pillar of its next-generation oncology biosimilar portfolio.

Cosentyx, a treatment for autoimmune diseases, is also expected to face a patent cliff around 2029 in the U.S. and around 2030 in Europe. Celltrion is conducting a global Phase 3 clinical trial for CT-P55, a biosimilar of Cosentyx. After receiving approval this year to reduce the number of patients enrolled in the European clinical trial from 375 to 153, the likelihood of lowering clinical costs and shortening the trial duration has increased.

Meanwhile, it is also worth noting that the environment for biosimilar development is becoming more favorable. This is because the recent passage of the Biosimilar Regulatory Relief Act by the U.S. House Energy and Commerce Committee is expected to reduce the burden of clinical trials, which could give momentum to domestic companies’ development of follow-on products and market entry.

Lee Seung-kyu, Vice Chairman of the Korea Bio Association, stated, “Between 2026 and 2030, one-sixth of original drugs—or 15–20 percent—will face patent expirations, and approximately 17 products from Big Pharma will flood the market,” adding “Big Pharma is turning to M&A, licensing-in, and biosimilars as ways to replace these products. Since South Korea has the second-highest number of FDA-approved biosimilars globally—after the U.S.—it is highly likely to benefit from this trend,” he said.

However, he noted, “Not everyone will benefit,” adding, “Biosimilars also require funding and R&D capabilities on par with those needed for new drug development, and the barriers to entry are high; therefore, the benefits will be concentrated among companies with sufficient development and production capabilities.”