Samsung Biologics has completely separated its biosimilar (copycat biologic) business and has become a pure-play contract development and manufacturing organization (CDMO). Its 100% subsidiary Samsung Bioepis will be folded into "Samsung Bioepis Holdings" (tentative name) and launched as a holding company specializing in new drugs.
At an extraordinary shareholders meeting held at Songdo Convensia in Incheon on the 17th, a motion for a spin-off with these details was finally approved. With 93.0% (1,286 people) of all voting shares in attendance, it passed with a 99.9% approval rate. A partitioning of the company requires a special resolution of the shareholders meeting, which passes with the approval of at least two-thirds of attending shareholders and at least one-third of the total issued shares.
As of Nov. 1, the company will separate the business institutional sector subject to partitioning and establish Samsung Bioepis Holdings. The new corporation will include Samsung Bioepis, a biosimilar developer, and a newly established subsidiary specializing in antibody-drug conjugate (ADC) platform technology. Samsung Bioepis Holdings plans to complete the establishment of the new subsidiary by the 14th of next month.
This partitioning will proceed as a spin-off in which shareholders divide their shares in the existing corporation and the new corporation in proportion to their equity. Existing shareholders of Samsung Biologics will receive shares of Samsung Biologics and Samsung Bioepis Holdings at a ratio of 0.6503913 to 0.3496087, respectively. The ratio was calculated based on the current net worth book value. The listing change due to the partitioning and the relisting of Bioepis Holdings is on Nov. 24, and the partitioning date is Nov. 1. The record date for the allocation of new shares is Oct. 31, and the trading suspension period is from Oct. 30 to Nov. 21.
Samsung Biologics plans to use this partitioning to ease concerns about conflicts of interest with clients and to secure mid- to long-term growth engines by strengthening the expertise of each business.
Before the vote on the agenda, Samsung Biologics CEO John Rim said, "This spin-off is a decision to resolve clients' concerns about conflicts of interest and to maximize the strengths and potential of each of CDMO and biosimilars," adding, "Through this, we will completely resolve the conflict-of-interest issue between Logics and Bioepis that clients have raised and further enhance our competitiveness in winning orders."
Samsung Biologics has long faced criticism that having CDMO and biosimilar businesses under one organization carries a potential conflict-of-interest risk. Clients may feel burdened by a structure in which they outsource biosimilar production to Samsung Biologics while a competitor sits under the same umbrella. Investors have also assessed that efficiency is undermined because they must invest simultaneously in two businesses with different revenue structures and growth strategies.
After the partitioning, Samsung Biologics, as a pure-play CDMO corporations, plans to expand its gap-leading manufacturing capabilities and broaden its portfolio into advanced therapeutics such as ADCs and cell and gene therapies (CGT).
CEO John Rim said, "Samsung Biologics will raise global client satisfaction and continue to strengthen its competitiveness," adding, "Samsung Bioepis Holdings will expand its market share in biosimilars with Samsung Bioepis at the center and, through the new subsidiary, pursue next-generation technology sourcing, research and development (R&D) investment, and mergers and acquisitions (M&A) to secure future growth engines."
At the extraordinary shareholders meeting that day, attendees included CEO John Rim; Samsung Biologics Chief Financial Officer (CFO) Yoo Seung-ho; Samsung Bioepis CFO Kim Hyeong-jun; Samsung Biologics outside director Kim Younis Kyung-hee, a professor at the Ewha Womans University School of Law; Lee Chang-woo, chair of the Ethics Committee at The Korean Institute of Certified Public Accountants; former Yonsei University President Suh Seoung-hwan; KPMG Samjong Accounting Corp. partner Na Jae-kwang; and notary attorney Shin Myeong-ho.