TaiMed, a Taiwan-based biotechnology company, has picked Samsung BioLogics as its new contract manufacturing organization for the production of its novel biologic Trogarzo, used to treat patients with multidrug resistant HIV. The multiyear capacity contract, worth 150 billion won ($132 million), was concluded in August last year.

The deal was made after TaiMed suffered from the lower conversion rate at its Chinese partner Wuxi Biologics in the second half last year, wrote Jerry Su, an analyst at Credit Suisse, quoting the management of the Taiwanese company.

Despite having Wuxi as manufacturing partner that had even won the US Food and Drug Administration’s approval for the current good manufacturing practice of the drug, TaiMed chose Samsung’s bio drug manufacturing unit for “further cost reduction,” citing the Songdo, Incheon-based company’s production capacity. Samsung BioLogics is capable of producing 362,000 liters at a time.

“Management said the recent production yield/conversion rate (at Wuxi) has improved and is back to normal level but it still has decided to engage with the new CMO Samsung BioLogics,” the report said. “The new CMO has greater production scale (15,000-liter bioreactor vs Wuxi’s 2,000-liter); hence the production cost could be half of Wuxi Biologics’, assuming the same conversion rate.”

Trogarzo is an entry inhibitor HIV medication. Trogarzo was approved by the FDA for use by people living with HIV in March 2018. It targets to complete validation and tests before end-2019 and submit for FDA inspection for mid-2020 approval.

In a separate report, NH Investment and Securities, a local brokerage house, said Wednesday the deal was confirmed at an investor relations meeting last month, saying the deal demonstrates Samsung BioLogics’ global competitiveness in the mass production of drugs, making production costs lower.

Credit Suisse and other industry officials expected that TaiMed’s Trogarzo production would be made mainly in-house and by Samsung BioLogics for global sales, while keeping the output from Wuxi Biologics limited to the Chinese market.

“The deal of a Taiwanese company choosing Samsung over a Chinese CMO company reflects Samsung BioLogics’ large-scale production capacity for high quality bio drugs and its global reputation as a reliable CMO,” an industry official said.

Samsung had mentioned that it won a new deal with an Asian biotechnology company last year, without revealing the name, citing client confidentiality.

By Cho Chung-un (christory@heraldcorp.com)