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A vial of Moderna's COVID-19 vaccine is shown before being used at a temporary vaccination center in New York. (Reuters/Yonhap News)

Samsung Biologics (Samsung Bio) and the US-based global pharmaceutical company Moderna concluded a contract for fill-finish manufacturing of COVID-19 vaccines.

Moderna also signed a separate memorandum of understanding (MOU) on discussions with the South Korean government over potentially investing directly to build vaccine production facilities in South Korea.

For now, the focus has been on South Korea establishing strategic diversity to prepare for the possibility of the current pandemic dragging out into the long term — as the latest agreement means that South Korean businesses will be involved in consignment production on three out of four different types of COVID-19 vaccines, including ones based on mRNA technology.

But it's uncertain how much practical benefit the consignment production deals will bring in terms of increased domestic vaccine availability and profitability for the companies involved.

Some observers have noted that the Samsung Bio arrangement only involves a low level of cooperation in filling and packaging, without any transfer of the manufacturing technology for the vaccine solution.

According to accounts Sunday from the South Korean government, Samsung Bio and Moderna, there were two main areas that Moderna announced plans to pursue or consider in South Korea during a "vaccine partnership" event held in Washington on Saturday.

To begin with, it signed a contract with Samsung Bio for hundreds of millions of doses in fill-finish manufacturing. Based on this deal, Samsung Bio will begin receiving supplies of the vaccine solution from Moderna in the third quarter for "drug product" filling and packaging for supplies outside the US.

South Korean President Moon Jae-in poses for a picture with John Rim (left), CEO of Samsung Biologics, and Stephane Bancel, CEO of Moderna, at a hotel in Washington, on Saturday. (Yonhap News)

This arrangement is quite different from another technology cooperation deal between Moderna and the Swiss company Lonza, which it entrusted with "drug substance" duties that involve the transfer of mRNA manufacturing technology.

Previously, SK Bioscience signed contracts for consignment production of vaccines by AstraZeneca (AZ) and Novavax from solution to finished product. The latest deal is also different from another consignment production arrangement by a consortium including Huons and other domestic businesses, where the technology will be transferred for manufacturing of both the solution and finished product.

The other area that Moderna was pursuing involved direct investment in mRNA vaccine facilities in South Korea. This was the content of an MOU for potential investment in South Korea and cooperation on production-related discussions that were concluded between Moderna and South Korea's Ministry of Trade, Industry and Energy (MOTIE) and Ministry of Health and Welfare (MOHW).

"Moderna affirmed its intention to establish vaccine production facilities in South Korea," said Moon Dong-min, director of the MOTIE trade investment office, adding that the "final nature of investment will be determined through future discussions."

During the Washington event, Moderna CEO Stephane Bancel said that the MOU to speed along construction of mRNA vaccine production facilities in South Korea was meant for "the future," while the deal for fill-finish production by Samsung Bio was intended for "the present" and a response to the current pandemic.

Second Vice Minister of Health and Welfare Kang Do-tae said Sunday that the cooperation arrangements "lay the groundwork for advancement from 'K-disease prevention' to becoming a global vaccine hub."

The South Korean government also touted the diversification of South Korea's consignment production portfolio as a major achievement, noting that the latest deal adds an mRNA vaccine – Moderna – to a list that also includes viral vector vaccines – AZ and Sputnik – and a synthetic antigen vaccine – Novavax.

As the pandemic drags on and the emergence of virus variants raises the need for "booster shots," vaccine diversity becomes increasingly essential since viral vector vaccines, in particular, can become less effective the more they are administered.

But many factors suggest that the question of whether Moderna will build its production facilities in South Korea is far from settled. Industry observers have speculated Moderna may opt to invest elsewhere if it is not satisfied with the level of support offered by the South Korean government.

"According to the MOU, we would be providing support for investment activities, including making factory site recommendations for Moderna," Moon Dong-min said Sunday.

But Japan's Nikkei newspaper quoted Bancel on Friday as saying in a telephone interview that his company was "currently in discussions as we consider vaccine production in different Asian countries, including Japan."

It remains unknown whether a portion of the Moderna vaccines to be produced by Samsung Bio will be supplied to South Korea.

By Choi Ha-yan, staff reporter

Please direct comments or questions to [english@hani.co.kr]