Samsung Biologics plans to fully separate its biosimilar business from its contract development and manufacturing organisation (CDMO) unit to ease potential conflicts of interest between the two divisions. The move — unveiled Thursday — is also designed to help investors clearly value the two distinct units.Chief financial officer Seung Ho Ryu explained that "some pharmaceutical clients perceive the CDMO business of Samsung Biologics and the biosimilar business of Samsung Bioepis as a single entity." He noted that "despite…strict firewall protocols, concerns over potential conflicts of interest persist," leading to "a misconception that our biosimilar business competes directly with our clients’ products."Under the planned separation, Samsung Biologics — which has clients including AstraZeneca, Eli Lilly, GSK, Merck & Co., Pfizer and Roche — will operate as a pure-play CDMO firm, while Samsung Bioepis will come under the ownership of Epis Holdings. Along with biosimilars — which will remain its core business — Bioepis will also continue its expansion into new drug development and pursue growth through both R&D and M&A. According to Samsung Biologics, "the rapidly changing external environment," including US tariffs and drug pricing policies, also increased the urgency for the company "to proactively resolve structural risks stemming from the parent-subsidiary relationship."Ryu said that both Samsung Biologics and Bioepis have been undervalued because of different investment profiles, with CDMO prioritising stability and biosimilars coming with higher returns with greater risks. "With the spin-off, we expect Biologics and Epis Holdings will be valued independently based on their own business model," he said, adding that Bioepis will not go public for at least the next five years.The spin-off is subject to shareholder approval at a general meeting scheduled for September 16, and is set to come into effect on October 1.
