Lotte Biologics is pushing to enter the global contract development and manufacturing organization (CDMO) market for biopharmaceuticals by expanding its manufacturing footprint. The company aims to become a global CDMO player through its acquisition of a manufacturing facility in Syracuse, New York, and the construction of its Songdo mega plant in South Korea.
However, industry observers say simply expanding production capacity is not enough to establish competitiveness. Global pharmaceutical companies place significant weight on manufacturing experience, quality management capabilities, and a proven supply track record when selecting production partners, meaning it could take considerable time for a new CDMO to gain a foothold in the market.
According to industry sources on July 8, Lotte Biologics recently received approval for the use of its Songdo Plant 1 after completing major construction work roughly two years after breaking ground. The facility has an annual antibody drug production capacity of 31,700 gallons.
Lotte Biologics said it has secured a manufacturing foundation capable of competing in the global CDMO market. Recently, Lotte Group Chairman Shin Dong-bin also visited the site as part of his on-site management activities.
Still, completing a factory does not automatically generate revenue. The key challenge is winning large manufacturing contracts, and recent trends have been less than encouraging.
According to Lotte Holdings’ first-quarter business report released in May, Lotte Biologics produced just three manufacturing batches during the quarter. The company produced 73 batches in 2024 and 67 in 2025, and industry observers noted that the first-quarter figure was low even when accounting for seasonality. Plant utilization also fell to 14% in the first quarter from 81% in 2024 and 74% last year.
Chairman Shin Dong-bin visits Lotte Biologics’ Songdo Campus Plant 1 in Incheon on July 3 and receives an explanation of the production process in front of about 4,000-gallon bioreactor.
Securing New Customers After BMS Contract Volumes
Lotte Biologics’ Syracuse facility in the U.S. was acquired from global pharmaceutical company Bristol Myers Squibb (BMS). The company purchased the plant in 2023 for approximately $160 million, positioning it as a key foothold for its global CDMO business.
The manufacturing volumes tied to BMS at the time of the acquisition initially provided a stable revenue base. However, those production volumes ended in January, making customer acquisition for the Syracuse facility a key priority.
Lotte Biologics said some production lines are currently operating on a limited basis as major equipment upgrades continue through early next year.
“The production schedule has been adjusted due to production volume management rather than the termination of our agreement with BMS,” the company said. It added that the lower production figures reflect ongoing facility modernization and that full ramp-up is expected around mid-2027 after scheduled maintenance and equipment upgrades are completed.
An industry source noted that once a CDMO manufacturing partner is selected, transferring production requires significant time and expense, making customers reluctant to switch providers.
Lotte Biologics has announced several CDMO agreements with global pharmaceutical companies this year as it works to expand its customer base. In mid-May, for example, it disclosed a contract manufacturing agreement with U.K.-based Optima Pharma, bringing its total contract announcements for the first half of the year to four.
However, none of the contract values have been disclosed. Because the company has yet to announce any contract through a regulatory filing, some industry observers have questioned the scale of its order backlog.
Competition is also intensifying as established industry leaders such as Samsung Biologics and Switzerland’s Lonza continue to dominate the market, while Japan’s Fujifilm and China’s WuXi Biologics are also expanding aggressively.
Lotte Biologics’ Syracuse Bio Campus.
Improving Financial Performance With Group Support
Lotte Group has designated biotechnology as one of its future growth businesses and continues to invest heavily in the sector. However, improving profitability remains a challenge given the company’s early stage of development.
Lotte Biologics posted first-quarter revenue of approximately $8.3 million and a net loss of approximately $37.5 million, with revenue down 43% year over year and net loss widening 149%.
Because CDMO revenue depends on customers’ clinical development timelines and manufacturing schedules, simply completing production facilities may not be enough. Industry observers say that without securing major contracts capable of reshaping its business, the sustainability of the project could come under pressure.
Ultimately, Lotte Biologics will need to demonstrate differentiated technology and customized customer service capabilities—not just expand manufacturing capacity—to strengthen its competitiveness in the global market.
The company said interest from potential global customers continues to grow, including on-site visits to its facilities.
“Songdo Plant 1 is scheduled to begin full-scale operations in November following regulatory approval,” a Lotte Biologics official said. “Once the Songdo Bio Campus begins full operations, we expect meaningful synergies with the Syracuse Bio Campus, which will accelerate our growth.”
Meanwhile, Lotte Biologics has decided to raise approximately $170.2 million through a rights offering to finance construction of Songdo Bio Campus Plant 1.
The company plans to issue 4.209 million new common shares at approximately $40.44 per share. The record date for the offering is July 20, while subscription for existing shareholders is scheduled to begin on Aug. 19.
Whether existing shareholders—including Lotte Holdings, Lotte Holdings Japan, and Hotel Lotte—will participate in the capital raise will be determined at their respective board meetings.
