CDMO industry sees mo’ mo’ expansion

It’s a decent time to be a Contract Development & Manufacturing Organization (CDMO). Google “CDMO expansion” and you’ll spend hours sifting through recent and relevant articles about how CDMOs are expanding, merging, and/or acquiring assets. Recently, one of the industry’s largest CDMOs (WuXi AppTec) raised more than $353m in its initial public offering on China’s Shanghai exchange. Here are two good sources for recent activity in the CDMO space: 2017 DCAT summary and one from 2018. For a more graphical summary of CDMO activities, see this infographic. And if that’s not enough, here’s one example of a recent 1,000-person expansion from Lonza at their New Hampshire site. Given all the activity in the industry, we don’t see a way around the fact that soon CDMOs will have Mo’ Money, Mo’ Money.

Sam sung blue, everybody knows one

Be honest, did anyone get the Neil Diamond reference? 2,000 InsightCity bonus points if you did. So, why is Samsung blue? A week ago, Samsung BioLogics (the world’s 3rd largest biotech contract manufacturer) lost $6B in market cap because South Korea’s financial regulator indicated there is a “suspicion it breached accounting rules to inflate its net profit before its 2016 listing.” In 2015 they posted a ₩1.9 trillion net profit, in 2014 they posted a ₩28 billion net loss. Too many zeros. This comes on the heels of Samsung’s heir apparent, Lee Jae-yong, being formally indicted a year ago on multiple charges including bribery and embezzlement. See Samsung BioLogics’ response here (spoiler, they say they didn’t do it). It’s going to take more lawyers than My Cousin Vinny to clear this one up.