Samsung Biologics, Celltrion Hit Record Q3 Results, Intensifying Revenue Race

Samsung Biologics and Celltrion, two of South Korea's top biopharmaceutical firms, both posted record quarterly earnings in Q3, setting them on target to surpass 5 trillion won in annual revenue. Celltrion outperformed Samsung Biologics in revenue, while the latter retained its profit edge, fueling escalating competition between the industry titans.

Celltrion's third-quarter revenue climbed 53.1% year-on-year to 1.58 trillion won ($1.19 billion), with operating profit soaring 74.3% to 525.3 billion won. Samsung Biologics, in contrast, posted 1.49 trillion won in revenue and 640.1 billion won in operating profit, marking 18.5% and 1% growth respectively. Celltrion generated 85.2 billion won more in revenue, while Samsung Biologics earned 114.8 billion won more in operating profit.

Samsung Biologics, specializing in contract development and manufacturing (CDMO), has continued its growth trajectory through capacity expansion. Utilizing Plants 1–4, increasing output at Plant 5, and revenue from its US Rockville facility, acquired in March, bolstered its performance. However, initial costs for expanding new facilities dampened profitability, reducing its operating profit margin from 50.4% to 43.0%.

Samsung Biologics is also venturing into the peptide sector to diversify its business, pursuing a PolyPeptide Group acquisition, expected by late November. Celltrion, on the other hand, bolstered earnings quality by boosting higher-margin new product sales. Revenue from its new product lineup grew 74% year-on-year to 905.8 billion won, comprising 67% of total biopharmaceutical product revenue.

Notably, allergy treatment Omlyclo's revenue surged 542.3% year-on-year, aiding earnings growth. Celltrion's operating profit margin improved to 33.3%, a 4.0 percentage point increase year-on-year. The company aims to broaden distribution channels in the US for new products like Omlyclo and Aptozma to further enhance overseas sales.

For the first nine months, Samsung Biologics recorded cumulative revenue of 4.07 trillion won, narrowly surpassing Celltrion's 4.04 trillion won by 29.7 billion won. As Celltrion outpaced Samsung Biologics in revenue growth, the gap raises the likelihood of a reversal in their full-year revenue rankings. Analysts anticipate both companies to well exceed 5 trillion won in annual revenue.

However, they face distinct challenges. Samsung Biologics must raise utilization rates at its new manufacturing facilities to restore profitability while addressing potential production disruptions due to prolonged labor-management tensions. Celltrion's success in sustaining earnings growth hinges on the successful worldwide expansion of its new products.