Samsung Biologics Completes Spin-Off, Lays Foundation for Leap as a Pure-Play CDMO

Spin-off Process Completed in Five Months
by Board Resolution Substituting for Split Report Meeting

Samsung Biologics announced on November 3 that it has completed the process of a spin-off and has transitioned to a "pure-play CDMO" structure, focusing exclusively on its core contract development and manufacturing organization (CDMO) business.

On this day, Samsung Biologics disclosed through its website that its board of directors had resolved to substitute the split report meeting with a board resolution, thereby finalizing the spin-off process to establish Samsung Epish Holdings by separating its investment and subsidiary management division. The effective date of the spin-off is November 1, and the company plans to proceed with all related procedures, including registration of the company split.

Samsung Biologics Campus in Songdo, Incheon. Samsung Biologics

With this, Samsung Biologics has successfully completed the spin-off process announced in May within approximately five months. Following the disclosure of the spin-off plan on May 22, the company smoothly carried out the necessary steps, including the submission of a securities registration statement in August, the effectiveness of the statement in September, and the resolution at the extraordinary general shareholders' meeting on October 17.

Notably, at the extraordinary shareholders' meeting, the proposal to approve the spin-off plan was passed with an overwhelming approval rate of 99.9%, confirming strong shareholder support for the split. In addition, Institutional Shareholder Services (ISS), the world’s largest proxy advisory firm, recommended approval of the split, recognizing its strategic rationale for enhancing business specialization. The National Pension Service, the third-largest shareholder (7.3%), also exercised its voting rights in favor, further demonstrating the high level of market confidence in the necessity of the spin-off.

Once the registration of the company split is completed, all procedures for the spin-off will be finalized. Shares of Samsung Biologics, which have been temporarily suspended from trading until November 21 for the split, will be divided into shares of Samsung Biologics and Samsung Epish Holdings, with relisting and new listing scheduled for November 24.

Through this spin-off, Samsung Biologics has addressed concerns raised by some clients regarding potential conflicts of interest and has established itself as a pure-play CDMO, laying the foundation to become a global top-tier CDMO. Although Samsung Biologics has strictly separated its business operations from its subsidiary Samsung Bioepis by maintaining a thorough firewall, concerns persisted due to Samsung Bioepis’s biosimilar business competing with client companies. This spin-off completely resolves such concerns and also alleviates the dilemma for investors who previously had to invest in both CDMO and biosimilar businesses simultaneously.

Now operating as a pure-play CDMO, Samsung Biologics plans to accelerate the strengthening of its CDMO capabilities based on its three-pronged growth strategy: production capacity, portfolio, and global presence. By completing its second bio campus (plants 5 through 8) by 2032, the company aims to maintain a production capacity gap with 1,324,000 liters and continue diversifying modalities, including antibody-drug conjugates (ADC) and organoids. Having already secured 17 out of the global top 20 big pharma companies as clients, Samsung Biologics also plans to focus on expanding its global top 40 client base by targeting the Asian market, including Japan.

Meanwhile, Samsung Biologics continues to deliver solid performance despite the rapidly increasing uncertainties in the global economy. The company recorded its highest-ever quarterly revenue in the third quarter, with standalone sales of 1.2575 trillion won, and is expected to achieve its previously raised annual revenue growth guidance of 25-30%.

John Rim, CEO of Samsung Biologics, stated, "This spin-off has solidified our identity as a pure-play CDMO and provided a springboard for us to become a leading global bio company. We will continue to strengthen our business specialization based on world-class competitiveness to further enhance our corporate value."

This content was produced with the assistance of AI translation services.