CDMO Samsung Biologics Raises $2.5 Billion in New Shares and Completes Full Acquisition of Samsung Bioepis

On April 20, Samsung Biologics, a leading contract development and manufacturing organization (CDMO), announced it had completed a full acquisition of Samsung Bioepis, a biosimilar company that had operated as a joint venture with Biogen. Samsung Biologics raised $2.5 billion through the issue of new shares in April and made an initial payment of $1.0 billion to Biogen using paid-in capital. Pursuant to the terms of the acquisition agreement, Samsung Biologics has now fully acquired Bioepis as a wholly owned subsidiary. The CDMO will pay the remaining by the agreement in installments over two years.

Samsung Biologics’ capital increase involved issuing 5,009,000 shares, with Samsung Electronics and Samsung C&T Corporation making equity investments through the subscription of over 3.2 million shares. 

In addition to providing capital for the Samsung Bioepis acquisition, the funds raised will be used to support Samsung Biologics’ continued expansion of its facilities in Songdo, South Korea.

“Today’s announcement marks a significant milestone for Samsung Biologics in our continued venture into the biosimilar business and accelerating biosimilar growth,” said Samsung Biologics president and CEO John Rim in a statement. “By leveraging our extensive experience as a leading CDMO, we will further contribute to saving the lives of patients and address a wide array of diseases.”

Accelerating Biosimilar Growth

Samsung Biologics’ acquisition of Samsung Bioepis is an important component of the company’s broader strategic growth plan, which involves diversifying its portfolio in addition to increasing manufacturing capacity and expanding its global footprint.

“By acquiring the full ownership of Samsung Bioepis, as announced in January this year, Samsung will leap forward as a global biopharmaceutical company with three business areas: CDMO, biosimilar, and new drugs,” explained Rim in a March letter to shareholders.

The Samsung Bioepis acquisition will accelerate Samsung Biologics’ move into biosimilars, drugs designed to replicate the effectiveness of biologic reference medicines. Biosimilars are demonstrated to be similar in efficacy, safety, and immunogenicity to an approved biologic product but can offer significant cost savings and increased patient access.

In a recent interview with The Financial Times, Rim explained that biosimilars have mostly achieved market penetration in Europe, but he sees potential for market expansion, including in the U.S.

“The U.S. will start to pick up as well because all the health systems globally are under more pressure to reduce expenses and make [treatments] more available to patients,” he said.

In a decade of operation, Samsung Bioepis has developed 10 biosimilars, including six currently available worldwide. Its first wave of therapeutics focuses on immunology and oncology. This includes infliximab, etanercept, and adalimumab biosimilars used to treat immunological diseases such as rheumatoid arthritis, as well as trastuzumab and bevacizumab biosimilars for oncology applications. The company is currently expanding into new areas of unmet needs in hematology, gastroenterology, endocrinology, and ophthalmology.

Samsung Biologics’ goal in acquiring Samsung Bioepis is to improve Samsung Bioepis’ autonomy and agility in business operations, accelerate its sales growth, improve its operating margins, and increase its capabilities and performance in the development of cost-effective novel drugs that save patients’ lives.

Expanding Facilities  

After the $1 billion payment to acquire Samsung Bioepis, the remainder of the $2.5 billion in capital raised will be devoted to Samsung Biologics’ expansion of its facilities in Songdo.

Samsung Biologics is currently constructing its Plant 4 “Super Plant” in Songdo. The plant, which will become partially operational in October 2022, is set to be the largest biomanufacturing CDMO facility in the world upon completion, with a capacity of 256,000 liters. Samsung Biologics is also in the process of securing 350,000 square meters of additional land in Songdo for its Bio Campus II, which will be 30% larger than the CDMO’s Bio Campus I. 

Samsung Biologics’ expansion of facilities provides additional opportunities to diversify its portfolio, particularly in terms of mRNA vaccine production, an area in which the CDMO saw success in 2021 as a provider of fill/finish services for Moderna’s COVID-19 mRNA vaccine.

“Samsung Biologics has been continuously exploring new opportunities to diversify its business portfolio beyond its current primary business as an antibody CDMO,” said Rim. “Following the successful start of our mRNA vaccine fill/finish manufacturing last year, Samsung Biologics has added  an mRNA drug substance manufacturing facility to offer a true end-to-end manufacturing service for mRNA vaccines and therapeutics.”

This facility will be used to produce a COVID-19 mRNA vaccine candidate for GreenLight Biosciences.

Multidimensional Growth

Samsung Biologics’ decision to raise capital with the goal of expansion and diversification is a clear indicator that, as Rim noted in his address to shareholders, the company is ready to “leap forward” to extend its capabilities beyond CDMO services.

While Samsung Biologics’ expected total capacity of 620,000 liters upon completion of Plant 4 will reaffirm its status as the world’s largest CDMO, the company is implementing what Rim described as “multidimensional growth,” potentially pursuing its drug development capabilities across a diverse portfolio. 

With the acquisition of Samsung Bioepis and continued expansion plans, Samsung Biologics is building on significant growth from previous years, including a 35% increase in revenue in 2021, to establish itself as a global leader in the biopharmaceutical industry.

Rim summarized this strategic growth plan at the 2022 J.P. Morgan Health Care Conference held in January.

“Our next decade will be marked by increased business expansion and portfolio diversification,” said Rim. “While continuing to achieve best-in-class CDMO services and championing the biosimilar business, we will also lay the groundwork for novel drug development, to ultimately become a full-service biopharmaceutical company.”