Samsung Bioepis Co., a biosimilar development unit of South Korea’s top conglomerateSamsung Group, has begun its new drug development business with gene therapy pipelinesto spur the company’s long-term value creation.The company entered a preclinical stage with multiple gene therapy candidates targetingrare diseases earlier this year, pharmaceutical industry sources said on Sunday.Gene therapy treats or prevents diseases by replacing mutated genes or alteringmalfunctioning genes.Samsung Bioepis plans to file an investigational new drug (IND) application to conduct aphase 1 clinical trial next year, targeting rare diseases including liver and metabolic illnesses.The company will also develop new drugs by using antibody-drug conjugates (ADCs).New drug development will be the biggest challenge for the group to take on since theconglomerate started its bio business by launching contract drug manufacturer andbiosimilar producer Samsung Biologics Inc. in 2011 and the biosimilar developer SamsungBioepis in 2012.NICHE MARKET WITH POTENTIALIt hasn’t been easy for the Korean conglomerate to start a new drug business, apharmaceutical industry official said. “Unlike chips, smartphones and home applianceswhich tend to pay off after investing in research and development, new drug developmenttakes more than 10 years and a significant amount of capital. Furthermore, the success rateis less than 10%,” the official added.The conglomerate is eyeing the niche market for rare diseases as some countries offerbenefits on clinical research, allowing speedy procedures for development, and there is abig growth potential for treatment for uncommon illnesses.The group is expected to face limited growth of its current bio businesses, contractmanufacturing of drugs and biosimilar development and production, amid intensifyingglobal competition.“The operating margin for biopharmaceutical contract manufacturing is 30-40%, while thefigure for new drug businesses is more typically more than 50%,” said Seoul-based Shinyoung Securities Co. analyst Choung Yu-kyung. "The family owner of Samsung Group has a deep understanding of suffering from rarediseases as some members of the founding family had a rare genetic disease called Charcot-Marie-Tooth disease,” a bio industry source said.  SHIFT TO DRUG DEVELOPMENTSamsung Group had considered buying global new drug developers, rather than developingits own drugs.“With our existing businesses, there is a limit to grow as a company with 20 trillion-30trillion won of annual revenue (from the current 3 trillion-4 trillion won). We have no choicebut to acquire a new drug maker to leap forward,” Samsung Biologics Chief Executive JohnRim said at a press conference last October.  But the group has shifted to the development of its own drugs as Samsung ElectronicsCo. has lost ground to its rivals in fiercer competition for artificial intelligence chips, leavingthe conglomerate unable to afford to invest a huge amount of capital for the bio affiliates’mergers and acquisitions.The conglomerate has prepared for new drug development via its Samsung Life ScienceFund of 170 billion won, co-created by the group’s de facto holding firm Samsung C&TCorp., Samsung Biologics and Samsung Bioepis.Among the fund portfolios are US biotechs Jaguar Gene Therapy and BrickBio. The fundwill invest in US gene therapy developer Latus Bio in the second quarter of this year.The group expects its biosimilar sales to become a cash cow for new drug development. Samsung Bioepis has developed seven commercialized biosimilars in autoimmune,oncology, ophthalmology and hematology. The company has 28 global clinical trials, one ofthe largest numbers for an Asian drug developer excluding Japanese.Samsung Bioepis posted 1 trillion won in revenue and 205.4 billion won in operating profitlast year. The company expects great synergy effects between its parent Samsung Biologicsas gene therapy drugs can be mass-produced, a Samsung official said. (ICE SEOUL)

Fonte notizia: The Korea Economic Daily