In a bid to allay conflict-of-interest concerns, Korean manufacturing giant Samsung Biologics is decoupling from its biosimilars development unit.
Starting later this year, Samsung Bio will devote itself fully to contract manufacturing under a plan to spin off a new investment holding company that will oversee the drugmaker’s biosimilar subsidiary Samsung Bioepis.
The spinoff of the new company—tentatively named Samsung Epis Holdings—is expected to take place on Oct. 1, though that timeline is subject to change, Samsung Biologics said in a corporate filing (Korean) on Thursday.
The new company will inherit 100% of Samsung Bioepis, which both develops and markets the biologic copycat drugs known as biosimilars. Once the split is complete, Samsung Bio will hold 1.16 trillion Korean won (roughly $840 million) in capital versus the new company’s 622.1 billion won ($450 million), Seung Ho Ryu, EVP of business support at Samsung Biologics, said on a conference call about the separation.
Samsung Biologics’ U.S.-based contracting business will be the CDMO’s sole remaining subsidiary following the spinoff, Ryu added.
The decision to split the businesses comes in response to industry concerns about conflicts of interest between Samsung Biologics—which contracts with many major drugmakers—and Samsung Bioepis, which develops biosimilars to branded drugs losing patent protection.
There also appears to be a false impression among some in the industry that Samsung Bio and Samsung Bioepis operate as a single entity, which Ryu argued is not the case.
“This creates a misconception that our biosimilar business competes directly with our clients’ products,” he said on Thursday’s call. “Despite our strict firewall practices, concerns around potential conflicts of interest have not been fully resolved, and such concerns could pose systemic risks to our business expansion.”
Ryu also pointed to broader market pressures, singling out tariffs and proposed drug price regulations in the U.S., to justify “preemptively” addressing the “inherent conflict-of-interest risk” at play.
The division should also come as good news to investors, who will now be able to place bets on Samsung’s CDMO and biosimilars businesses independently, Ryu argued.
“We expect the hidden value of each business to be more clearly recognized and appropriately evaluated by the market as a result,” he said.
While Samsung Biologics will continue to capitalize on its winning CDMO formula, the new company will “focus on sourcing new growth engines” through research and M&A activity, Ryu said.
Samsung Bioepis, for its part, will continue to develop and launch new biosimilar products, Hyoung Joon Kim, EVP and head of corporate management at Samsung Bioepis, added during the call.
Unlike some of its CDMO peers, Samsung Biologics has continued to deliver steady growth and expand its production footprint in the aftermath of the COVID-19 pandemic. Conversely, many contractors experienced unprecedented growth during the pandemic but have failed to hold onto that momentum afterward.
At the top of the year, Samsung Bio announced that its 2024 sales had grown 23% over 2023 to 4.55 trillion Korean won (then worth about $3.3 billion). In a statement, the company’s CEO, John Rim, attributing the continued momentum to expanded partnerships with both pharma and biotech companies.
More recently, the CDMO in May picked up another production contract worth 737.3 billion won ($518 million) from an unnamed U.S. drugmaker. The deal represents some 16.2% of Samsung Bio’s consolidated 2024 revenue, the company said at the time.
The production tie-up followed a separate $1.2 billion contract Samsung inked with an unnamed Asian pharmaceutical company in October.