Samsung Invests in Drugs After dominating the smartphone market.
The biggest company in South Korea is now investing at least $2 billion into biopharmaceuticals. This investment includes pumping money into the growing segment of biosimilars, which are cheaper versions of brand name biotechnology drugs that have lost patent protection.
With a reported annual revenues of $327 billion, Samsung aims to become a major player in the biotech industry. It is expected the the biotech industry is going to produce sales of more than $220 billion within the next five years. Billionaire chairman Lee Kun Hee has been investing in new areas that might shore up growth of the company as the electronic market is reaching saturation.
Samsung’s mandate is to become No.1 in everything they do, so the long term goal of this investment is to become a leading pharmaceutical company. These plans are based around biosimilars. There are plans to sell their first biosimilar, which is a version of Amgen’s arthritis therapy Enbrel in 2016. With further plans for Remicade treatment for autoimmune diseases in 2017. Both being sold in Europe
As Samsung expands into the biosimilars market, they will face competition from Pfizer and Amgen, regulatory hurdles and an undeveloped market. While in Japan and Europe biosimilars are widely accepted, the US has yet to set specific guidelines or approve any drugs in that class.
U.S regulators are taking into careful consideration a range of different issues, including what research will be required to permit cheaper therapies to be substituted at pharmacies for the original drugs. There are a number of factors why trying to create an exact copy is actually harder than making traditional generic pills.
Companies haven’t made much money with biosimilar drugs because most products remain under development and the U.S. market is untapped, said Giles Somers, an analyst at Datamonitor Healthcare.
Biosimilars are often follow on versions of expensive drugs for conditions such a cancer or arthritis, these types of drugs happen to be big revenue generators.
Samsung Biologics has been set up with Quintiles, with a deal being agreed in October to make proprietary biologic medicines on behalf of Roche Holding. They also have a partnership with Bristol Myers Squibb.
South Korea’s government is also encouraging local companies to expand in the biosimilars market, by offering programs to support exports and providing guidance for overseas licensing and regulations.
Samsung have got high hopes for biosimilars and the biopharmaceuticals industry. With the expectation to make more than $1.8 billion a year from biopharmaceuticals by 2020.