Global contract development manufacturing organization (CDMO) companies are going all-out to secure production facilities in the United States after Congress passed the Biosecure Act in March 2024, which restricts transactions with Chinese bio-companies.

According to foreign media outlets including The Nikkei and AFP on Tuesday, Fujifilm Diosynth Biotechnologies, Japan’s largest CDMO company, plans to invest an additional $1.2 billion in its CDMO business to further expand its bio manufacturing facility in the United States. With this investment, Fujifilm’s total investment in its planned facility in Holly Springs, North Carolina, increases to $3.2 billion.

The facility will include additional equipment of the same capacity as the originally planned 160,000-liter cell culture bioreactor.

Lonza, the world’s top CDMO company by sales, signed a contract to acquire a biopharmaceutical factory owned by Roche in Vacaville, California, for $1.2 billion on March 21st, 2024. The company also announced an additional investment of $561 million for production facility upgrades and expansions at this site.

“The moves are measures to preempt the market void caused by WuXi Biologics and Catalent in the changing CDMO market,” a Korea Biotechnology Industry Organization official said. “Companies are adjusting actions accordingly as the United States expands its domestic manufacturing capacity.”

The U.S. Senate Committee on Homeland Security and Governmental Affairs passed a biosecurity law restricting transactions with Chinese bio-companies in March 2024. Regardless of who wins the upcoming U.S. presidential election in November, it is expected that the national security pretext will continue to press for increased U.S. investment in industrial bases and job creation among allies and friendly countries, while simultaneously trying to limit China, a strategic competitor, to maintain economic and military power differentials.

As this perspective persists, there are suggestions that the bio industry will be forced to follow this trend.

“Since (U.S.) President Joe Biden signed the National Biotechnology and Biomanufacturing Initiative executive order to promote our bio industry in 2022, concerns about U.S. preference have continued in the bio industry,” a bio industry official said. “While the biosecurity law targeting hostile countries such as China is not expected to have an immediate impact on ally countries including Korea, we need to observe what impact it will have on future policy directions.”

Novo Nordisk, a developer of obesity treatments, sprung a surprise on the market by acquiring Catalent, the third largest CDMO company in the world, in February 2024 and plans to produce its obesity treatments, Ozempic and Wegovy, via Catalent starting in 2026.

With Catalent producing Novo Nordisk’s products, it is expected that competition in the market will be restricted, opening up new opportunities for other CDMO companies.

Samsung Biologics is also consistently considering the possibility of acquiring CDMO facilities in the United States. The company’s president and chief executive officer John Rim said earlier that the company is planning mergers and acquisitions as well as overseas factory construction.

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]