Quantum jump in biopharmaceutical industry: a case of Korea’s catching up with Europe and US

Abstract

ABSTRACT In the science and technology-based biopharmaceutical industry, the gap between advanced countries and developing countries is large. What is interesting recently is that a latecomer such as Korea in the biopharmaceutical industry has an opportunity to make a quantum jump through new to a business model. This study investigated latecomer firms’ catching up with advanced European and American firms in the biopharmaceutical industry, focusing on the cases of Celltrion and Samsung Biologics, which are representative Korean biopharmaceutical firms. In terms of profitability, as determined by EBITDA margin, Samsung Biologics has overtaken Lonza and Catalent. In terms of firm value, Samsung Biologics has overtaken Catalent. Celltrion surpassed all firms in 2017 and 2018, however it has been caught up by Catalent since 2020. In the Environmental, Social & Governance (ESG) management, Korean firms ranked lower grades than European and American firms. The driving force of the catching-up strategy revealed by this study is as follows: (1) utilize changes in the industrial structure and environment, (2) maximize the capabilities of the innovation system, (3) make strategic choices and (4) secure an independent and stable position in the relevant field.