Samsung Biologics splits biosimilar business to boost CDMO, investment flexibility
Spin-off aims to sharpen operational focus, build client trust, enhance shareholder value
Samsung Biologics, the biotech arm of Samsung Group, announced Thursday that it will spin off its biosimilar operations into a new holding company, separating them from its contract development and manufacturing organization business to sharpen the strategic focus of each unit.
Through the structural realignment, Samsung Biologics will concentrate solely on its CDMO business, while the newly created holding company, tentatively called Samsung Epis Holdings, will oversee the biosimilar unit Samsung Bioepis. Kim Kyung-ah, CEO of Samsung Bioepis, will concurrently serve as CEO of the new holding company.
Samsung Bioepis was established in 2012 as a joint venture between Samsung Biologics and US-based Biogen, with Samsung initially holding an 85 percent stake. In 2022, Samsung Biologics acquired Biogen's remaining shares for $2.3 billion.
'This split reflects our decision to enhance competitiveness by responding swiftly to global changes and sharpening strategic focus,' said Samsung Biologics CEO John Rim. 'Both entities will accelerate their growth and are well-positioned to establish themselves as global leaders in biopharma.'
Samsung Biologics clarified that the creation of Samsung Epis Holdings through the spin-off bears no relation to the governance structure of Samsung Group.
The separation also aims to address concerns from CDMO clients regarding the in-house biosimilar unit. The dual-track model had raised conflict-of-interest concerns, particularly related to potential technology leakage.
'We've invested significant time and resources to ease these concerns, yet it's realistically difficult to eliminate all worries across our client base,' said Ryu Seung-ho, executive vice president of Samsung Biologics, at a press conference on Thursday.
'This restructuring will further allow each business to be properly valued in the market and give shareholders more flexibility to invest based on their own strategies," he added.
Under the deal, shareholders will receive shares in both companies based on current book values — approximately 0.65 shares in Samsung Biologics and 0.35 shares in Samsung Epis Holdings for each share held.
With the restructuring expected to fuel focused growth, both entities have outlined distinct long-term goals.
Samsung Biologics will double down on its ambition to become a global top-tier CDMO by investing in three key areas: expanding production capacity, diversifying its service portfolio, and widening its international footprint. New initiatives will target next-generation biomanufacturing technologies, including antibody-drug conjugates or ADCs, adeno-associated viruses or AAVs, and pre-filled syringes.
Samsung Epis Holdings will focus on expanding Samsung Bioepis's biosimilar portfolio to over 20 products, while also developing platform technologies and exploring investment opportunities in emerging technologies and global markets.
'Samsung Epis Holdings plans to establish new subsidiaries in addition to managing the existing Samsung Bioepis,' said Kim Hyoung-joon, vice president of Samsung Bioepis, at the press conference.
'These new entities will focus on developing platform technologies for future growth. We also aim to generate revenue through investments in domestic and global companies,' he added.
Regarding the upcoming procedures, the company will submit a registration statement on July 29, followed by a shareholder meeting for approval on Sept. 16.
Upon completion of the spin-off, effective Oct. 1, Samsung Epis Holdings will make Samsung Bioepis its wholly owned subsidiary. Both Samsung Biologics and Samsung Epis Holdings are scheduled to be relisted on Oct. 29.
Trading of Samsung Biologics shares will be temporarily suspended from Sept. 29 through Oct. 28.
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