In March 2024, one of the biosecurity laws restricting transactions with Chinese bio companies happened to pass the U.S. Congress, and now the global contract development and production- CDMO companies happen to be trying to secure production facilities within the U.S. This is because of the concerns that bio could as well be the next target for U.S. priority after semiconductors as well as batteries.
It is well to be noted that on April 16, 2024, foreign media such as Nihon Keizai Shimbun as well as AFP reported Fujifilm Dio, which happens to be Japan’s largest CDMO company. Synth Biotechnology: Fuji Film announced that it has plans to go ahead and invest an additional $1.2 billion within the CDMO business in order to further expand its bio-manufacturing facilities across the United States.
With this kind of investment, Fujifilm’s overall investment in Holy Springs, North Carolina, United States, has gone on to increase to $3.2 billion. It is worth noting that more facilities of the same size are going to be installed at the facility in addition to the previously scheduled cell culture bio-reactor of around 160,000 liters.
It is worth noting that earlier on March 21, 2024, Lonza, which happens to be the world’s No. 1 CDMO sales company, went ahead and inked a contract so as to acquire a biopharmaceutical plant that is owned by Roche in Bakerville, California, for almost $1.2 billion. Apart from this, it also announced that it would go ahead and invest an additional $561 million in the facility so as to upgrade and expand the production facilities. The Korea Bio Association interpreted this measure happens to be a pre-emptive step by companies in order to anticipate the market gap that happens to be caused by Wuxi Biologics and Catalent when it comes to the changing CDMO market. The fact is that as the U.S. is expanding its manufacturing capacity within the country, it happens to be in line with this.
Apparently, on March 6, the U.S. Senate Homeland Security Committee went ahead and passed a biosecurity law restricting transactions with Chinese biocompanies. Regardless of who is assuming power in the U.S. presidential election in November 2024, the prevailing view happens to be that the government will go on to maintain its economic and military gaps by way of keeping strategic rival China in check to the hilt while at the same time pressuring allies to go ahead and invest in the U.S. so as to strengthen their industrial base as well as increase jobs in the U.S. on the pretext of national security.
As per one of the bio sector officials, since President Joe Biden inked an executive order for the National Biotechnology and Bio Manufacturing Initiative in order to foster the bio industry within the United States in 2022, there happen to be concerns pertaining to the U.S. priority in the bio industry. The biosecurity law, which happens to be targeting US adversaries like China, is not going to affect Korea as well as other allies immediately, but the fact remains that one needs to look at how it is going to affect the policy stance in months and years to come.
Notably, in February 2024, Novo Nordisk, which happens to be the developer of obesity treatment WeGovi, went on to surprise the world when it acquired Catalent, which is the world’s third-largest CDMO sales company. In addition to this, Novo Nordisk looks to mass-produce Ozempic as well as WeGovi, which happen to be obesity treatments, in 2026 via Catalent. Analysts point out that Catalent’s mass production when it comes to Novo Nordisk products has indeed gone on to open up new opportunities for various other CDMO companies, thereby pointing out that the production when it comes to competing products is inevitably going to be limited.
In yet another scenario, Samsung Biologics happens to be also steadily raising the possibility when it comes to acquiring CDMO facilities within the U.S. Prior to this, John Lim, the Samsung Biologics President, also said that he happens to be planning mergers and acquisitions- M&As as well as overseas plant construction. As a matter of fact, it is also considering taking control of the overseas factories, such as the one in the U.S., but is reportedly kind of careful considering the limited factories that are up for sale.
