Korea’s Pharmaceutical Paradox

 

Korea’s Pharmaceutical Paradox: No Blockbusters, But a Backbone of Global Drug Supply

South Korea’s industrial landscape shares a common theme: while it often struggles to lead global markets with original technologies, it excels at supporting high-tech industries from behind the scenes.

Take Samsung Electronics, Korea’s flagship tech company. It doesn’t develop its own operating system, but when it comes to hardware—especially smartphones—few companies in the world can match its level of precision and quality. Based on Google’s Android OS, Samsung makes some of the most sought-after phones globally.

The same applies to semiconductors. Samsung isn’t known for designing CPUs or GPUs—those cutting-edge chips come from places like Intel, AMD, or NVIDIA. Even with memory semiconductors, Samsung lacks its own design IP. But when it comes to manufacturing those chips with incredible precision, Samsung and SK hynix rank just behind TSMC, the global leader.

Korea's Pharmaceutical Situation

The story is nearly identical in Korea’s pharmaceutical sector. Meet Samsung Biologics—often dubbed the “Samsung Electronics of Biotech.” True to its nickname, the company doesn’t develop new drugs itself. Instead, it focuses exclusively on contract development and manufacturing (CDMO), producing blockbuster drugs for global pharma giants. Just like Samsung Electronics excels at making devices designed elsewhere, Samsung Biologics is a master at manufacturing drugs it didn’t invent.

Its recent organizational restructure sent a clear message: “We don’t do new drug R&D.” But the company’s commitment to flawless production and timely delivery remains rock-solid. In a world where being No. 2 can be a smarter, more profitable move, Samsung Biologics has found its niche. As China ramps up new drug development, Samsung Biologics may become a go-to production base—but as always, companies with “Samsung” in their name don’t seem bothered by where the orders come from.

Yuhan Corporation's long-time client, Gilead and HIV injection

Not all Korean pharma companies have given up on new drug development, though. Yuhan Corporation is a standout example. Unlike Samsung Biologics, Yuhan runs a dual-track strategy: it actively develops new drugs while also engaging in contract manufacturing.

Here, the structure is slightly different. Drug development is led by Yuhan itself, while CDMO operations are carried out by its subsidiary, Yuhan Chemical—which also serves as its primary cash cow.

Yuhan Chemical has signed active pharmaceutical ingredient (API) supply deals with several global pharma companies, giving it a competitive edge in securing future development contracts. One of its long-time clients is none other than Gilead Sciences.

Gilead recently secured FDA approval for “Lenacapavir,” branded as Sunlenca (marketed as "YesutoGo" in Korea), a long-acting HIV prevention injection. This follows its successful HIV treatment portfolio, which includes Emtriva and Truvada. The new approval is expected to significantly boost Yuhan Chemical’s revenue as the official API supplier.

Gilead is not stopping with the U.S. market. It is currently seeking marketing approvals in countries across the globe, including the EU, Australia, Brazil, Canada, South Africa, Argentina, Mexico, and Peru. Global rollout is fully underway, with projected sales of Sunlenca reaching $3.2 billion by 2030—about 4.4 trillion KRW.

Yuhan is increasing its production power

To prepare for increased demand, Yuhan Chemical invested 6.5 billion KRW in Q1 alone, aiming for a total of 23.2 billion KRW to enhance productivity. It completed the expansion of its Hwaseong plant, which now supports both small-scale clinical production and full commercial manufacturing. Custom-tailored CDMO services are now a reality.

As a result, production volume is rising. Yuhan Corporation's disclosures show that Yuhan Chemical’s API production value increased from 164.8 billion KRW in 2023 to 223.4 billion KRW in 2024.

“We can't disclose specifics due to contract terms, but we’re working with several global clients beyond Gilead in both production and supply partnerships. With expanded capacity, we’re expecting further growth in our supply volume,” said a Yuhan Corporation representative.