Samsung Group, a well known South Korean company that provides semiconductors, televisions and smartphones is now expanding their business through replica drugs. The company is investing on a biosimilar or replica drugs which has the same concept with the generic drugs. The idea is to sell generic drugs that offer a similar treatment but sold in a much lower price.
The Samsung Biopsies Co. is the affiliate company of Samsung that will be selling the replica drugs that has lost its patent protection. They plan to replicate Johnson’s and Johnson’s best-selling drug Remicade, a drug used for the treatment of arthritis. JNJ’s current stock rating is -0.40%.
Another separate unit called Samsung Biologics Co. is handling new contracts to develop various biologic medicines for branded medicines.
The units are working on biological drugs taken from living cells. The biosimilar drug was accepted for review by the Food and Drug Administration. This marks their first attempt of Samsung to penetrate the drug industry in the US. Remicade is the first drug offered by Samsung in response to FDA’s legal opening of biosimilar drugs.
Earlier, they also got approval to sell a replica of Remicade in the European Medicine Agency. They also began the marketing and selling of Enbrel, a drug used for Rheumatoid Arthritis in the European Market. Enbrel is a drug that is exclusively owned and sold by Pfizer.
Samsung has invested billions of dollars for this new expansion. For the past five years, Samsung has been putting a lot of investment in this new project. The company hopes that this new investment will generate more sales which will be beneficial for the continued growth and expansion of the company.
The Chief Executive Officer of Samsung Bioepis unit, Christopher Hanson Ko, admitted in an interview, that they are still on the infancy stage. But he has strong conviction, that since they are a conglomerate of Samsung, they will soon become the Number 1 pharmaceutical company in the world.
Competing with the Major Players
Samsung will soon be competing with the major players in the biotechnology such as Pfizer and
Amgen who has more stable and wider drug portfolios. This venture is also a challenge for the company considering that the market is still underdeveloped.
Unlike in Japan and Europe were they already granted the distribution of biosimilar drugs. In the US, the regulations and guidelines for replica drugs are still on deliberation.
The biggest Korean company has invested over $2 billion in biopharmaceuticals in the hope that they could sustain their market lead by investing on other profitable areas. Samsung has over $327 annual revenue, and has become the major player in the smartphone and technical industry. In fact, it has surpassed the sales of its competitor – the Apple Company.
But with the saturating market of smartphones, Samsung’s Billionaire Chairman, Lee Kun Hee has decided to invest on some new potential ideas and market. They have started to invest in biotechnology because they expect to generate sales of over $220 billion in the next five years. Investing in biotechnology may support the growth of the family owned company.