Will the U.S. domestic production preferential policy be affected by CDMO companies such as Celltrion, SK Vasa, and Samba?

President Biden issued an executive order on the 15th local time that requires the U.S. Foreign Investment Review Committee (CFIUS) to review foreign investment in the U.S. to examine national security risks such as national security threats and cybersecurity.

This is a follow-up measure following the administrative order of the National Biotechnology and Bio Manufacturing Initiative signed by President Biden on the 12th. The administrative order included strengthening investment in industrial sovereignty and research and development (R&D) fields across the bio industry.

The areas where administrative orders are applied are promising technologies such as microelectronics, artificial intelligence (AI), quantum computing, advanced clean energy, and climate adaptation technology, including biotechnology and bio-manufacturing.

The U.S. spends more than $2 billion to implement the executive order. In addition, $1 billion will be invested over the next five years to build a bio-production base in Korea, and $200 million will be invested to protect bio-production facilities from cyber attacks.

There have been views that such policies to increase production in the U.S. and protect its bio-industry sector may also hurt domestic companies. In particular, Celltrion, Samsung Biologics, SK Bioscience, and Lotte Biologics, which are in charge of CDMO for U.S. pharmaceutical companies, are mentioned as companies that may be affected.

In particular, Celltrion is commissioned to produce various U.S. pharmaceutical companies’ biopharmaceuticals along with Teva’s migraine treatment Azobi, SK Bioscience’s COVID-19 vaccine, and Samsung Biologics is commissioned to produce biopharmaceuticals along with Moderna vaccine.

However, Lotte Biologics, which entered the bio industry this year, is known to have already acquired $160 million (about 200 billion won) in Syracuse biopharmaceutical production plant in New York, which is analyzed to be less affected by the U.S. administrative order.

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