RESEARCH TRIANGLE PARK, N.C.—In late February, Quintiles, an integrated biopharmaceutical services company offering clinical, commercial, consulting and capital solutions worldwide, entered into a strategic partnership with Samsung, as the South Korean corporate giant known most for its electronics jumps feet-first into the biopharmaceuticals market.
Under the terms of the agreement, Quintiles will make a minority 10 percent investment of approximately $30 million to start a new joint venture company with Samsung in the first half of this year to provide biopharmaceutical contract manufacturing services in South Korea. Samsung will own the remaining 90 percent of the joint venture company in the following proportions: Samsung Electronics Co. Ltd. getting 40 percent; Samsung Everland Inc. also getting 40 percent; and Samsung C&T Corp. getting the remaining 10 percent.
The joint venture company represents Samsung's first step into the biopharmaceutical business. Among its specific plans, Samsung intends to commercialize biosimilars by 2016 and then expand into innovative biologics from there. The joint venture also represents a big step for Quintiles, which most people still tend to think of for its contract research organization (CRO) offerings.
"This is further evidence that Quintiles is much more than a CRO," notes Phil Bridges, associate director of corporate communication for Quintiles, who says Quintiles' role is now more as an ally to help companies succeed in the "New Health" landscape. "This partnership illustrates how Quintiles can use its resources and expertise across the clinical, commercial, consulting and capital realms to help customers achieve their strategic goals."
Also, he notes, South Korea is a significant part of Quintiles' growth strategy in Asia, and adds, "we believe this investment will benefit Samsung, Quintiles, the biopharmaceutical industry and ultimately, patients."
"This partnership with Samsung demonstrates how at Quintiles we leverage not only our intellectual and human capital, but also how we can invest to advance mutual interests and accomplish shared goals," says Paul Casey, vice president and head of Asia corporate development for Quintiles. "It shows we are committed to developing non-traditional alliances in order to help our customers navigate risks and seize opportunities in the complex industry landscape and ultimately help patients."
Plans call for the joint venture company to construct a biopharmaceutical manufacturing plant in the Incheon Free Economic Zone in Songdo, Incheon, South Korea.
Groundbreaking is expected in the first half of 2011 and full-scale operation is expected to begin by April 2013. The plant will feature, in addition to "cutting-edge" technologies, an 8,000-gallon mammalian cell culture bioreactor capacity capable of producing 1,300 pounds of biopharmaceutical products that are expected to be sold mostly on international markets.
"Biopharma customers around the world recognize Quintiles' ability to deliver both traditional services and non-traditional, innovative business solutions. This agreement is another example of that," Bridges says. "Leveraging our consulting group's existing expertise in biosimilar strategy development and our clinical group's experience in helping customers develop biologics, Quintiles is well-positioned to help customers navigate the biosimilars market."
Many might say, "why Samsung?" but Bridges is more likely to say, "why not?"
Samsung is the world's largest private conglomerate based on revenue, he notes, and the company has many lines of business.
"They have been extremely successful," Bridges says. "Combined with our expertise and resources, we are confident in our investment and our strategic alliance with Samsung. We believe there will be significant growth from companies in Asia that are investing in research and will have products going into clinical development in the next several years."
Also, Quintiles is no stranger to the Korean landscape, having operated in South Korea since 2000, where the company has conducted 102 studies at 540 sites and has recruited 6,800 patients for trials.
In May 2010, Samsung identified biopharmaceutical as one of five new strategic businesses that would lead the group's future, and the company announced plans to invest $20.4 billion through 2020 in the new businesses, with about a tenth of that earmarked for biopharmaceuticals. Samsung predicts that the five new growth businesses will create some 45,000 jobs altogether.
Quintiles won't be the only company to offer life sciences expertise to Samsung, with one of the Korean company's executive vice presidents, Kim Tae-han, having publicly said recently: "We aim to launch another joint venture for biosimilars this year."
