[Reporter’s View] Real test begins for K-CDMOs

In the midst of global supply chain restructuring, Korea’s CMO (Contract Manufacturing Organization) and CDMO (Contract Development and Manufacturing Organization) industries are emerging as new growth drivers for the biopharmaceutical sector.

 

The shift away from China is acting as an opportunity factor, while independent achievements based on Korean firms’ technology and quality are also increasing.

 

However, challenges such as potential overcompetition and global political and security risks still loom large.

 

Samsung Biologics has been securing large-scale contracts since the beginning of this year.

 

The company signed agreements worth more than USD 1 billion each with pharmaceutical firms in the U.S.

 

and Europe.

 

Its cumulative orders for the year have reached KRW 5.2435 trillion, nearly matching last year’s total of KRW 5.4035 trillion in just 8 months.

 

Since its founding, the company’s cumulative orders have exceeded USD 20 billion.

 

ST Pharm, though smaller in size, is also attracting attention with solid contracts.

 

It secured a KRW 20.3 billion deal with a European pharmaceutical company for small-molecule APIs, and a KRW 18.3 billion supply contract with a U.S.

 

biotech firm for oligonucleotide APIs.

 

Its order backlog surged 76% from KRW 232 billion at the end of last year to KRW 407.9 billion as of date.

 

Once considered a latecomer in RNA therapeutics manufacturing, ST Pharm has quickly increased its presence by signing consecutive deals with global companies.

 

SK Pharmteco achieved a symbolic milestone in December last year with a KRW 2 trillion order for obesity drug APIs.

 

At a time when global pharmaceutical firms are heavily investing in the development of GLP-1 class drugs, the fact that a Korean CDMO has actively joined this trend carries significance.

 

At the same time, the company has also demonstrated diversification potential in cell and gene therapy (CGT), securing a contract with Switzerland’s Ferring Pharmaceuticals for a bladder cancer therapy.

 

Smaller and mid-sized firms are also moving actively.

 

ENcell signed a KRW 5.7 billion AAV gene therapy CDMO contract with the Korea Research Institute of Bioscience and Biotechnology in July, the largest single deal in the company’s history and equivalent to 80% of its annual revenue.

 

Prestige Biologics landed a KRW 13.2 billion deal with an undisclosed pharma company, laying the groundwork for long-term CDMO operations.

 

Medipost also entered the CDMO market in earnest with a KRW 2 billion deal for cell therapy manufacturing.

 

However, viewing this trend solely as a ‘tailwind’ may raise issues.

 

While it's true that global pharmaceutical companies are turning their attention to Korea, it also means the competitive arena has broadened and become more complex.

 

Potential manufacturing bases like India and Eastern Europe are also rapidly expanding their scale.

 

This is precisely why Korean CDMOs must differentiate themselves by emphasizing development capabilities and innovative technologies, moving beyond simple contract manufacturing.

 

Moreover, the moment dependency increases, paradoxically, so does the risk.

 

If revenue becomes concentrated on specific companies or products, the structure becomes entrenched, making it more vulnerable to external environmental changes.

 

To avoid a ‘second China dependence’ incident, the contract portfolio needs to be diversified, and a mid-to-long-term investment roadmap supported.

 

The surge in orders driven by the de-China effect is also sparking concerns of excessive competition among Korean companies.

 

While the U.S.

 

Biosecure Act may restrict Chinese firms, companies from Japan and Eastern Europe are also moving to capture opportunities in supply chain realignment.

 

This makes it difficult to assume that Korea alone will enjoy a sustained boom.

 

The recent contract wins are certainly encouraging signals.

 

Yet, as the saying goes, true competitiveness lies not in winning contracts but in maintaining them.

 

What is needed now is not celebration, but sober assessment.’ The boom Korean CDMOs are experiencing is only the beginning.

 

The answer to whether they can lead the global market through ‘development’ and ‘innovation’ beyond mere ‘contract manufacturing’ will naturally emerge through the challenges ahead.