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Heard at #CPHI: VC funding trends; Samsung eyes expansion; and supply chain diversification

October 31, 2023, By Anna Brown

As many as 40,000 people in the drug manufacturing industry arrived in Barcelona this week for the annual Convention of Pharmaceutical Ingredients (CPHI), which is now in its third decade.

Busy as always, there was a notable sense of optimism at CPHI’s second year back in person. Although this year saw many companies needing to find efficiencies due to big-picture economic pressures, many are positive that things are looking up from here.

Endpoints News heard speakers and met with delegates at the confab, with some key takeaways:

Is venture capital funding on the rise? Due to biotech funding constraints, CDMOs have been reporting less client demand and reduced revenue. However, there are hints VC funding could start to increase, albeit slowly. “The last three-quarters of funding into the VC and private funding side has shown signs of life,” said Brian Scanlan, life sciences operating partner at Edgewater Capital Partners, at a press conference. Funding in biotech in the second quarter of 2023 was around $12.0 billion, down by 3% from last year, according to a report. While still down, funding is reaching levels seen just before the pandemic. Total investment into the biotech sector through July is $30.2 billion, and full-year 2023 is trending ahead of 2022, according to Scanlan’s analysis.

Samsung Biologics eyes expanding global footprint. When Samsung initiated Plant 5 in South Korea, the company’s global sales SVP, Kevin Sharp, said, “we had evaluated the US as a potential expansion point at that time. However, from both an investment and a time perspective, they were both significantly higher than what we could do in South Korea.” Nonetheless, with the establishment of an office in New Jersey, it would be very strategic to build into the US, perhaps even in Europe, Sharp told Endpoints.

India-based CDMOs see clients diversify supply chains. “The China alternative is India and India alone because other countries just don’t have the scale to get there very quickly,” said Ramesh Subramanian, chief commercial officer of Hyderabad-based CDMO Aragen Life Sciences. “Projects where the supply chain is solely based on China, they’re coming to us and they want an India-centric supply chain,” Subramanian added on the sidelines of the confab. Companies are heading or expanding into India due to the need to bolster supply security, low cost, and increase manufacturing speed, he said.

ADCs are trending. With big players such as Lonza and Samsung Biologics announcing investments to up their ADC capabilities, it’s clear manufacturers are turning to ADCs as a source of revenue over the next few years. Samsung’s Sharp added that ADCs are giving rise to more opportunities. ADCs were also a big trending topic at the recent European Society for Medical Oncology in Madrid.

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