Samsung Biologics to split off biosimilar business

[Lim Jeong-yeo, Edaily Reporter] Samsung Biologics announced on Thursday that it will establish ‘Samsung Epis Holdings’(tentative) through an equity spin-off, completely separating its contract development and manufacturing organization(CDMO) business from its biosimilar business. The company had been increasingly facing setbacks with customers identifying Samsung Biologics’s wholly-owned subsidiary Samsung Bioepis as a potential competitor. Through this split, Samsung Biologics expects to resolve any conflict of interest(COI) issues.

Samsung Biologics

Alleviating Potential Customer Concerns… Enhancing Shareholder Value

Samsung Biologics aims to completely separate its CDMO business and biosimilar business, in order to resolve potential concerns from CDMO clients about operating competing businesses as well as to relieve investors’ worries about having to invest simultaneously in two businesses with different profit models.

Samsung Biologics and Samsung Epis Holdings plan to strengthen their respective business competitiveness and enhance corporate and shareholder value by firmly establishing independent decision-making structures through this split.

Faced with rapidly increasing external uncertainties such as changes in the international trade environment and drug price reductions, Samsung Biologics decided on the split to proactively eliminate the fundamental risk factors arising from the coexistence of the bio-CDMO and biosimilar businesses.

Samsung Epis Holdings to spearhead biosimilar and novel drug pursuits

Existing shareholders will receive shares of both companies according to the predetermined split ratio. Samsung Epis Holdings is being established by spinning off the division responsible for subsidiary management and new investments from Samsung Biologics. Kim Kyung-ah, CEO of Samsung Bioepis, will also serve as CEO of Samsung Epis Holdings.

The split will undergo procedures including submitting a securities report on July 29, and holding a shareholders’ meeting on September 16 to approve the split. The establishment date of Samsung Epis Holdings is scheduled for October 1, at which point Samsung Bioepis will be fully incorporated as a 100% subsidiary. Subsequently, the change listing of Samsung Biologics, and the re-listing of the Samsung Epis Holdings, are scheduled for October 29.

This corporate split will proceed as an equity split, where shareholders will receive shares of the new and existing companies in proportion to their shareholding ratio. Existing Samsung Biologics shareholders will receive Samsung Biologics and Samsung Bioepis Holdings shares in a ratio of 0.6503913 to 0.3496087. The split ratio was determined based on the current net asset book value.

Trading of Samsung Biologics shares will be temporarily suspended from September 29 (the day before the new share allocation record date) until October 28 (the day before the change and re-listing date).

Faster, More Flexible Decision-Making

Samsung Biologics and Samsung Epis Holdings anticipate to be able to make faster and more specialized decisions suitable for the characteristics of each business division.

Samsung Biologics, to become a purely CDMO company, plans to continue its growth based on its three key strategy -- production capacity, portfolio diversification, and global base expansion. Specifically, it will strengthen its CDMO capabilities and expand investments in new business areas such as antibodies, antibody-drug conjugates (ADC), adeno-associated viruses (AAV), and pre-filled syringes (PFS).

Samsung Epis Holdings, on the other hand, will nurture Samsung Bioepis as a leading biosimilar company by securing product portfolio of more than 20 biosimilar products. It also plans to continuously discover and invest in next-generation technology for future growth.

John Rim, CEO of Samsung Biologics, said, “We decided on this split to proactively respond to rapid changes in the global environment and to secure each business’ competitive edge through selection and focus. This will be an opportunity for both companies to accelerate growth and leap into global top-tier bio companies.”