Joon-lim, CEO and President of Samsung Biologics, says during a press conference held in Boston, USA, on the 17th (local time), “We will expand our production facilities to achieve an annual growth rate of 20-25%.”/Courtesy of Samsung Biologics

John Lim, CEO and president of Samsung Biologics, met with reporters on the 17th (local time) at the Bio International Convention (BIO USA) held in Boston, USA, and said, "The only reason Samsung Biologics is doing a spin-off is for value up."

Samsung Biologics announced a restructuring plan to establish Samsung Bioepis Holdings through a spin-off last month. Samsung Biologics will remain a specialized corporation in contract development and manufacturing organization (CDMO), while the development of new drugs and biosimilars previously handled by its subsidiary Samsung Bioepis will be separated into Samsung Bioepis Holdings. The newly established holding company Samsung Bioepis Holdings will fully incorporate Samsung Bioepis as a subsidiary.

◇"A structure that clients can accept is necessary"

On that day, CEO John Lim noted, "I directly proposed the spin-off," adding that it was a decision made to resolve conflicts of interest with global clients and to focus purely on the CDMO business. Clients are concerned about the risk of technology leaks because their competitor Samsung Bioepis is a subsidiary of Samsung Biologics.

Currently, 17 out of the top 20 global pharmaceutical companies by market capitalization are clients of Samsung Biologics' CDMO services. CEO John Lim said, "The remaining three global pharmaceutical companies have not signed contracts due to conflicts of interest," adding that it is important for global pharmaceutical companies to move towards a structure that they can accept, similar to Swiss pharmaceutical company Novartis spinning off its biosimilars subsidiary Sandoz.

He said, "Overseas clients have also responded very positively to the announcement of the spin-off," and added, "Despite our efforts, we have not completely dispelled the concerns of some global pharmaceutical companies, but this will be resolved cleanly with the spin-off."

The founding date of Samsung Bioepis Holdings is set for October 1. The company plans to undergo the change of listing for Samsung Biologics on October 29, while also proceeding with the re-listing of Samsung Bioepis Holdings. However, there are interpretations in the market that Samsung Biologics' decision to spin off is a strategy considering Samsung Group's governance structure.

A researcher at Samsung Biologics examines the biopharmaceutical production facilities. Samsung Biologics is expected to achieve a revenue of 4 trillion won this year.

◇"The fifth plant goes into full operation, aiming for the number one production capacity and market share"

The global CDMO market for biopharmaceuticals is becoming increasingly competitive as more corporations enter. Samsung Biologics is aiming for a significant gap over its competitors by quickly enhancing its production capabilities.

The company commenced full operation of its fifth plant, which has a capacity of 180,000 liters, last month in Songdo, Incheon, securing the world's largest production capacity of 784,000 liters. It plans to add three more plants by 2032 to increase both its production capacity and market share from its current fourth position to first.

Samsung Biologics submitted a proposal solely for the bid to supply unused industrial land in the international city of Songdo, Incheon, on the 10th. The land covers an area of 187,827 square meters, and the supply price is 249.2 billion won. The site is adjacent to Samsung Biologics' campus 1 (plants 1-4) and campus 2 (plants 5-8), so if selected in the bid, it is expected to be used for establishing campus 3.

CEO John Lim stated, "Campus 3 will be a key base for creating a bio hub, and we plan to complete it sequentially over approximately nine years," adding, "In the past, when expanding production facilities, there were concerns that it might be excessive, but looking back after 2-3 years, it was never excessive."

Samsung Biologics has also established sales offices in New Jersey, Boston, and earlier this year in Tokyo, Japan, to expand its CDMO orders. CEO John Lim predicted that the CDMO market will continue to grow. He said, "The demand for existing products has increased due to the expansion of indications for blockbuster drugs," adding that the demand for new products, such as antibody-drug conjugates (ADCs), new drugs for Alzheimer's and Parkinson's disease, and treatments for autoimmune diseases and cancer, will require even greater production capacity in the future.

◇"Preparing for U.S. tariffs, maintaining revenue growth outlook"

Despite the company's optimistic outlook, new uncertainties have arisen in the market recently. The U.S. government's announcement of the potential imposition of tariffs on pharmaceuticals has increased uncertainty in the global pharmaceutical and biotech industry environment. Nevertheless, CEO John Lim expressed confidence in stable growth, stating, "In January of this year, I presented a revenue guidance of 20-25% growth compared to last year, and this will be maintained."

CEO John Lim noted, "Currently, the CDMO business generally has a structure where the clients bear the tariffs, so there is not a significant direct impact right now," and added, "We are preparing scenarios in case new trade barriers arise due to policy changes in some countries."