Seoul, May 22 Samsung Biologics, a biotech arm of South Korea's Samsung Group, said Thursday it plans to spin off its biosimilar development business to streamline its operations and focus on its core contract development and manufacturing organisation (CDMO) services.
According to a regulatory filing, the company will establish a new entity, Samsung Epis Holdings, which will later incorporate Samsung Bioepis, a biosimilar drug developer, as a wholly owned subsidiary, Yonhap news agency.
The spinoff process will proceed with submitting a securities report on July 29, followed by a shareholders meeting on September 16 for final approval.
Samsung Biologics explained that the split will allow the company to concentrate resources on its CDMO business, which operates under a different revenue model compared to biosimilars.
CDMO refers to a company that handles not only the outsourced manufacturing of drug substances but also all of the innovation and development work that occurs before production.
Samsung Biologics said the move is aimed not only at improving operational focus but also at addressing concerns from CDMO clients about potential conflicts of interest.
In particular, the company acknowledged that some customers have raised concerns over the possibility that proprietary technologies for original drugs might be shared with Samsung Bioepis, which operates in the biosimilar space.
"As Samsung Bioepis has been expanding its biosimilar business, the concerns of Samsung Biologics' customers have gradually increased, which has had some impact on the competitiveness of our orders," said Ryu Seung-ho, chief financial officer at Samsung Biologics, during an online briefing.
"After the separation, we expect our customers' concerns about conflicts of interest will be better addressed."
Samsung Biologics originally established Samsung Bioepis as a joint venture with US pharmaceutical company Biogen in 2012. It acquired Biogen's stake for $2.3 billion in 2022, making Bioepis a wholly owned subsidiary.
Ryu also emphasised that the spinoff is not part of any broader corporate governance restructuring within Samsung Group.
Samsung Biologics is one of the world's leading CDMO firms, reporting 4.54 trillion won ($3.3 billion) in sales and 1 trillion won in net profit in 2024.
Shares of Samsung Biologics fell 1.36 per cent to 1.08 million won ($783) as of 11:37 a.m. The spinoff plan was announced before the market opened.
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