Samsung Biologics, one of the world's largest contract development and manufacturing organizations (CDMOs), has secured a $1.3 billion production contract with an unnamed US-based pharmaceutical company, according to a corporate filing. The deal is expected to run until the end of 2029, representing the second multi-billion-dollar agreement for the South Korean company within the past year.
Second Major Contract in 12 Months
This latest agreement follows Samsung Biologics' $1.4 billion contract signed in January with an unnamed European pharmaceutical manufacturer. The back-to-back deals underscore the growing demand for outsourced biologics manufacturing services and Samsung Biologics' expanding role as a key player in the biopharmaceutical industry.
The South Korean CDMO continues its aggressive expansion despite current trade headwinds. The company now operates five plants with a combined capacity of 784,000 liters following the recent launch of its fifth Songdo facility. By 2027, production capacity is expected to climb to nearly 1 million liters to keep pace with rising global demand from drugmakers.
Tariff Uncertainty Shapes Industry Landscape
The deal comes at a time when the pharmaceutical industry faces significant uncertainty regarding US trade policies. The Trump administration has requested that the US Supreme Court hear an appeal to overturn a previous ruling by a lower court that declared a majority of the president's tariffs null and void.
In a 7-4 decision, the US Court of Appeals for the Federal Circuit ruled that President Trump exceeded his power in enacting import taxes on many countries globally. "It seems unlikely that Congress intended, in enacting IEEPA [the International Emergency Economic Powers Act], to depart from its past practice and grant the President unlimited authority to impose tariffs," the court stated.
The current tariff landscape includes 25% duties on Mexican and Canadian imports and 10% on goods from China, implemented to encourage these nations to limit illegal immigration and fentanyl trafficking into the United States.
Pharmaceutical Trade Agreements Take Shape
Despite broader tariff concerns, the White House has reached specific agreements limiting pharmaceutical import duties. Current arrangements cap tariffs on pharmaceutical imports at 15% for the European Union and 0% on generics from Japan. As part of the Japanese agreement, Japan has committed to making $550 billion worth of investments in the United States.
However, a formal trade deal with South Korea remains unfinalized, potentially making Samsung Biologics' US expansion a calculated risk given the possibility of steep import duties on drugs from the country.
Industry Reshoring Momentum
The tariff environment has encouraged pharmaceutical manufacturers to begin reshoring production efforts to the US. Amgen recently announced a $600 million commitment to a new science and innovation center at its global headquarters in Thousand Oaks, California.
"At Amgen, we're continuing to invest in the future of American science and innovation," said Robert A. Bradway, Amgen's chairman and CEO. "This new center will empower our scientists with the tools and collaborative environment they need to shape the next era of scientific discovery and advance medicines that improve human health."
The Samsung Biologics deal highlights the complex dynamics facing global pharmaceutical manufacturing, where companies must balance expansion opportunities with evolving trade policies and regulatory uncertainties.
