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Samsung to spin off Biologics, put biosimilar subsidiary in holding company to boost CDMO

Published: 23 May. 2025, 07:00

The Samsung Biologics headquarters in Incheon is seen on May 31, 2023. [JOONGANG ILBO]

Samsung Group is striving to strengthen its investments and research and development (R&D) in the bio industry by establishing an intermediate holding company for its bio affiliates, spinning off Samsung Biologics, which has become Korea's largest bio company and a major global contract development and manufacturing organization (CDMO).

This reorganization also signals a potential impact on the conglomerate's overall governance structure.

Spinning off Samsung Bioepis

Samsung Biologics announced on Thursday that it will create a new holding company, Samsung Epis Holdings, through a simple division. This is to separate the CDMO business from the biosimilar and new drug development operations.

With this spin-off, Samsung Biologics will become a pure-play CDMO company. The biosimilar firm, Samsung Bioepis, previously a 100 percent subsidiary of Samsung Biologics, will now be wholly owned by the newly formed Samsung Epis Holdings.

The primary reason for this move is to alleviate concerns among global pharmaceutical clients. Original drug developers have been wary of Samsung Bioepis, which produces biosimilars, potentially accessing proprietary technologies.

A Samsung Bioepis researcher tests a new drug ingredient at a company laboratory [SAMSUNG BIOEPIS]

“Since we have a parent-subsidiary relationship with Samsung Bioepis, clients perceived the two companies as the same entity, and there were concerns about conflicts of interest,” said Samsung Biologics CFO Ryu Seung-ho during an online briefing Thursday.

Ryu explained that Samsung Biologics’ competitiveness in CDMO orders was damaged because it had a biosimilar company as a subsidiary.

“I think Samsung Biologics and Samsung Bioepis were not fully evaluated in terms of their respective corporate values,” said Ryu. “This spin-off will help dispel concerns from clients and investors, ensure that their corporate values are fully evaluated and respond to changes in the global order environment where competition is intensifying.”

Blueprint for Samsung Epis Holdings

The spin-off is set to be finalized after a shareholder meeting on Sept. 16, following a securities report filing on July 29. Samsung Epis Holdings is expected to be established on Oct. 1, with relisting processes for both the surviving company, Samsung Biologics, and the new entity on Oct. 29.

Under the spin-off ratio, current Samsung Biologics shareholders will receive shares in both companies at a 0.6503913 to 0.3496087 ratio, based on net asset book values. To prevent shareholder value dilution, Samsung Bioepis will not seek a dual listing for at least five years.

Samsung Epis Holdings plans to pursue aggressive growth through R&D investment and mergers and acquisitions (M&A). It will support Bioepis's biosimilar business and explore new bio growth engines via new subsidiaries. Kim Kyung-ah, the current CEO of Samsung Bioepis, will also lead the holding company.

The logo of Samsung Epis Holdings [SAMSUNG BIOLOGICS]

Samsung to complete its bio ecosystem

This development is especially notable as Samsung seeks new growth engines beyond semiconductors.

Samsung Biologics recently became the first Korean bio firm to surpass 4 trillion won ($2.9 billion) in annual revenue and may exceed 5 trillion won this year after already surpassing half of last year’s order volume in just four months.

Amid a global CDMO expansion race, Samsung Biologics maintains one of the world's largest production capacities at 784,000 liters (207,111 gallons).

By separating Samsung Bioepis from Samsung Biologics, Samsung can now simultaneously strengthen both contract manufacturing and new drug development. Samsung Epis Holdings aims to boost Bioepis's capabilities and make it the world's top biosimilar company through aggressive R&D and M&A strategies.

The Samsung Biologics headquarters in Incheon is seen on May 31, 2023. [JOONGANG ILBO]

Affecting the group’s governance structure?

A key challenge will be the financial capacity of the new holding company, as Bioepis's new drug ventures were previously funded by Biologics' CDMO revenue.

To implement platform acquisition, new business investments, and venture investment and M&A deals on a large scale, backing from major stakeholders like Samsung C&T, which has a 43.06 percent stake, and Samsung Electronics, which holds a 31.22 percent stake, will be essential.

While some interpret this spin-off as a signal of future governance reform within the Samsung Group, Ryu denied any connection, emphasizing that the move was strictly business-driven to create a win-win structure for Biologics and Bioepis.

“We decided on this spin-off so that we could proactively and nimbly respond to the rapid changes in the global environment and secure unrivaled competitiveness in each business through selection and focus,” said Samsung Biologics CEO John Rim. “This will be an opportunity for both companies to accelerate growth and leap forward as global top-tier bio companies.”

Translated from the JoongAng Ilbo using generative AI and edited by Korea JoongAng Daily staff.
BY KIM KYUNG-MI [[email protected]]