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Aug
22
Sandeep Singh Dhillon
Samsung Wants to Become a Drug Company – Investopedia.com
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Samsung Electronics, the South Korean consumer electronics company is expanding efforts to diversify into the pharmaceutical business, landing its first deal to develop drugs for diseases that are hard to treat.

While the company is best known for churning out mobile phones, semiconductors and other consumer electronics, it recently started to move into the drug market. In late July, The Wall Street Journal reported the company was gearing up to launch a generic version of Johnson & Johnson’s rheumatoid arthritis drug Remicade. The newspaper is now reporting that Samsung is forming a partnership with Japan’s Takeda Pharmaceutical Co. to fund and develop several drugs over the next few years with the first effort focused on a treatment for severe acute pancreatitis. Terms of the deal were not disclosed.

The Path Less Risky
According to the report, the company’s move to get into novel treatments of hard-to-treat drugs is a big enhancement of its drug efforts, but one that is also risky. Only one in 10 drugs that end up with human trials gets approval while companies could spend hundreds of millions of dollars and years working on formulations at the experimental level. Developing a generic version of a popular drug, as with Remicade, has proved to be a less risky strategy for many drug companies. According to the Journal, citing data from EvaluatePharma, the biologic market is on track to have $214 billion in sales in 2017 alone and sales are projected to hit $276 billion by 2020.

With saturation in the smartphone market, and Samsung seeing increased competition from U.S. and Chinese technology firms, the company is seeking ways to diversify beyond consumer electronics, and the pharmaceutical industry is one area it has set its sights on. The generic version of Remicade is expected to sell for 35% less than the current list price for the popular drug.

Samsung got approval from the Food and Drug Administration for the generic version in April, and the launch marked the company’s first push into the pharmaceutical market under its new Samsung Bioepis Co. unit. The biotech arm is going after generic versions of branded drugs that are made from living cells and will address complex diseases like arthritis and cancer, reported the Journal. The brand-name treatments can often cost as much as tens of thousands of dollars a year, presenting a big opportunity for lower-cost players to grab market share. And it is now adding novel drug therapies to its focus, which has always been a goal of the Bioepis unit. “At this stage of our company’s development, we believe this is the next logical step,” said Mingi Hyun, a Samsung spokesman, to the Journal, noting that the unit has held talks with other pharmaceutical and biotech companies to pursue similar deals to its partnership with Takeda.

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