Samsung Biologics to Spin Off Biosimilars Unit, Focuses on CDMO Business

Samsung Biologics, the Korean manufacturing giant, has announced plans to spin off its biosimilars development unit, Samsung Bioepis, in a strategic move aimed at addressing industry concerns and streamlining its business focus. The decision, set to take effect on October 1, 2025, will see the creation of a new investment holding company, tentatively named Samsung Epis Holdings, which will oversee Samsung Bioepis.

Addressing Conflict of Interest Concerns

The primary motivation behind this corporate restructuring is to alleviate industry concerns regarding potential conflicts of interest between Samsung Biologics' contract development and manufacturing organization (CDMO) business and its biosimilar development activities. Seung Ho Ryu, EVP of business support at Samsung Biologics, explained during a conference call that despite strict firewall practices, concerns about potential conflicts have persisted and could pose risks to business expansion.

"This creates a misconception that our biosimilar business competes directly with our clients' products," Ryu stated, highlighting the need to address these perceptions proactively.

Financial and Operational Details

Following the spinoff, Samsung Biologics will retain 1.16 trillion Korean won (approximately $840 million) in capital, while the newly formed Samsung Epis Holdings will hold 622.1 billion won ($450 million). The CDMO's U.S.-based contracting business will remain its sole subsidiary after the separation.

The move is expected to benefit investors by allowing them to invest separately in Samsung's CDMO and biosimilars businesses. Ryu anticipates that this will lead to clearer market recognition and more appropriate valuation of each business segment.

Future Focus and Growth Strategies

Post-separation, Samsung Biologics will concentrate on its core CDMO operations, capitalizing on its successful manufacturing formula. The company has shown steady growth even after the COVID-19 pandemic, with 2024 sales increasing by 23% over the previous year to 4.55 trillion Korean won.

Meanwhile, the new holding company will prioritize "sourcing new growth engines" through research and M&A activities. Samsung Bioepis, under the new structure, will continue its focus on developing and launching new biosimilar products, according to Hyoung Joon Kim, EVP and head of corporate management at Samsung Bioepis.

This strategic realignment comes at a time when Samsung Biologics continues to secure significant production contracts, including a recent $518 million deal with an unnamed U.S. drugmaker and a $1.2 billion contract with an Asian pharmaceutical company in October 2024.