[News Space=Reporter seungwon lee] Samsung BioLogics is drastically reorganizing its business structure through a spin-off.

On the 22nd, Samsung BioLogics announced through a public disclosure that it will split the company into the surviving corporation, ‘Samsung BioLogics’, which will be in charge of the contract development and manufacturing organization (CDMO) business, and the newly established corporation, ‘Samsung Epi Holdings’, which will act as an investment and holding company for biosimilar and new drug development. This split is a strategic decision to strengthen the expertise and competitiveness of each business through the complete separation of the CDMO and biosimilar businesses.

The company explained, “This is to address potential concerns that we are operating a competing business with our CDMO clients, and to address the concerns of investors who have to invest in two businesses with different revenue-generating methods at the same time.” In fact, the fact that Samsung BioLogics has been manufacturing new drugs for global pharmaceutical companies while its subsidiary Samsung Bioepis has been developing biosimilars (generic drugs) has been pointed out as a potential conflict of interest.

“As Epis’ similar business grew, concerns from Logics’ clients also increased, which had some impact on our competitiveness in winning orders,” said Yoo Seung-ho, vice president of Samsung BioLogics. “Through the spin-off, we will be better evaluated in the market.”

The split method is a spin-off, and existing shareholders will be issued Samsung BioLogics shares and Samsung Epis Holdings shares at a ratio of 0.6503913 to 0.3496087. The split will be carried out in the following order: submission of a securities report on July 29, approval at the general shareholders meeting on September 16, establishment of a new corporation on October 1, and change of listing and relisting on October 29.

The newly established Samsung Epi Holdings will acquire 100% of Samsung Bioepis' shares and incorporate it as a wholly owned subsidiary, and Kim Kyung-ah, CEO of Samsung Bioepis, will concurrently serve as CEO of the new corporation.

DS Investment & Securities researchers Kim Soo-hyun and Kang Tae-ho explained, "While the corporate value of Samsung affiliates, led by Samsung Electronics, has fallen significantly over the past year, Samsung BioLogics' corporate value showed the largest increase in the group and its performance growth was also the most prominent." They added, "There were various speculations in the market about Samsung Group's support for BioLogics and Samsung C&T's plan to handle BioLogics."

The securities industry is interpreting this division as going beyond a simple restructuring of the business structure, and as leading to a reorganization of Samsung Group’s governance structure and the strengthening of Chairman Lee Jae-yong’s control. In other words, from Samsung C&T’s perspective, it is an option that can control Samsung Bio Holdings while simultaneously increasing Samsung Electronics’ control.

Samsung C&T owns a 43.1% stake in Samsung BioLogics, and there is analysis that if it sells some of its stake in Samsung Epi Holdings after the split, it will be able to secure cash to purchase Samsung Electronics shares. In fact, there are also predictions that if Samsung Life Insurance has to sell its stake in Samsung Electronics due to revisions to the Insurance Business Act, this could be a stepping stone for Samsung C&T to secure funds to acquire it.

The stock price also showed great volatility, soaring more than 8% during the day of the split announcement, but then turning downward in the afternoon. The securities industry predicts that the value of Samsung C&T’s affiliates’ stocks will be re-evaluated as a result of this split.

Choi Gwan-soon, a researcher at SK Securities, said, “Considering that the value of Samsung C&T’s stake in Samsung affiliates is 55.9 trillion won, Samsung C&T, with a current market capitalization of 23.6 trillion won, is significantly undervalued,” adding, “This split will be an opportunity to highlight the value of its stake.”

The performance outlook is also positive. Samsung BioLogics recorded sales of KRW 1.2983 trillion and operating profit of KRW 486.7 billion in the first quarter of 2025, up 37.1% and 119.9% ​​year-on-year, respectively. On an annual basis, sales of KRW 5.8312 trillion and operating profit of KRW 1.864 trillion are expected. The securities industry expects that this division will strengthen the expertise of each business division and re-evaluate the corporate value.

Samsung BioLogics is going ‘all-in’ on the CDMO business, and is expected to exceed KRW 7 trillion in sales and KRW 2 trillion in operating profit by 2027. The ‘super gap’ strategy will continue, including the operation of Plant 5 and securing the world’s largest production capacity of 1,324,000 liters by 2032.

Samsung Epis Holdings aims to become the world's No. 1 biosimilar company by securing more than 20 types of biosimilars, developing new drugs, global M&A, and open innovation. 

DS Investment & Securities researchers Kim Soo-hyun and Kang Tae-ho analyzed, “If this decision is for business purposes, Samsung Bioepis will become an affiliate rather than a subsidiary of Samsung Bio, which will resolve the issue that ‘it is taboo in the global market for CDMO companies to develop their own new drugs,’ thereby removing an obstacle to growth.” They also added, “It also opens the possibility of Samsung Bioepis being listed on NASDAQ in the future.”

By completely separating the CDMO and biosimilar businesses, we can resolve concerns about ‘technology leaks’ and ‘conflicts of interest’ raised by global pharmaceutical customers. This will directly lead to strengthening Samsung BioLogics’ competitiveness in winning orders.

Samsung Bioepis (under Epi Holdings) can focus its capabilities on businesses with high future growth potential, such as new drug development and biosimilars. In particular, it can expand into new business areas such as ADC (antibody-drug conjugates) and AAV (adeno-associated viruses), and more actively pursue global partnerships and M&As.

Ultimately, Samsung BioLogics' latest personnel division is evaluated as a strategic move to simultaneously achieve three goals: resolving conflicts of interest, strengthening global competitiveness, restructuring the group-level governance structure, and re-evaluating the asset value of affiliates.

The growth potential of each business division, the reevaluation of Samsung C&T's asset value, and the stabilization of the group's governance structure are expected to have a positive impact on corporate value and stock prices in the mid to long term. This spin-off is a strategic move that goes beyond a simple restructuring of the business structure and simultaneously aims to reorganize the governance structure at the Samsung Group level and secure future growth engines.

A securities industry insider predicted, "In the short term, stock price volatility will be high, but in the mid to long term, it is highly likely that this will lead to growth in each business division, a reevaluation of Samsung C&T's asset value, and stabilization of the group's governance structure."

In particular, if Samsung Bioepis' global new drug development and listing and Samsung BioLogics' CDMO super-gap strategy become a reality, the corporate value and stock prices of Samsung Group's bio affiliates are expected to take a leap forward.