Samsung Biologics has successfully spun off its subsidiary Samsung Bioepis, which focuses on developing biosimilars. The stocks of Samsung Biologics and Samsung Bioepis Holdings began trading as separate entities.
Analysts are increasing their estimates for the value of the biopharmaceutical contract manufacturer due to its efficient operations and reduced risks from US tariffs, which is boosting investor confidence in the company.
Samsung Biologics ended at 1.789 million won, showing a decrease of 0.45 percent compared to Oct. 29 when the stock trading was halted for the spinoff.
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Even though Samsung Biologics has spun off its fully-owned subsidiary Samsung Bioepis, the market seems to think that the company's fundamental worth has not changed much.
Samsung Biologics announced in May that it would separate a section of its business responsible for managing its subsidiary and new ventures to establish Samsung Epis Holdings. The newly formed holding company would purchase all of Bioepis' shares from Biologics. Following the debut of Samsung Epis Holdings as a standalone entity on the KOSPI market on Monday, the spinoff process has been fully executed.
Samsung Biologics has resolved any potential conflicts of interest that its client drugmakers have been worried about by conducting a spinoff. This move addresses a significant concern in the industry. Samsung Biologics is focused on addressing the concerns of its clients, which include major pharmaceutical companies like Pfizer, Merck, Roche, and Eli Lilly, in order to prevent any possible leaks of information regarding drug development and manufacturing technologies to Samsung Bioepis.
In recent years, concerns have increased due to Samsung Bioepis fast-tracking the development of biosimilars and novel drugs, such as antibody-drug conjugate (ADC) cancer therapies.
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“By spinning off the Bioepis division, whose profitability can fluctuate depending on novel drug development, Samsung Biologics is now positioned for a more stable and predictable growth in corporate value,” Hana Financial Investment analyst Kim Seon-a said.
Mirae Asset Securities analyst Kim Seung-min predicted that Samsung Biologics' market value could increase to 106 trillion won ($71.36 billion) after the spinoff, up from 91 trillion won. He established a price target of 2.3 million won for the company.
Samsung Biologics achieved its highest quarterly revenue of 1.26 trillion won in the third quarter when viewed as a standalone entity. During the period from January to September, the company recorded total sales of 3.27 trillion won, approaching the 3.5 trillion won in sales from the previous year. The company stated that the impressive results were achieved due to the full utilization of Plants 1 to 4, fueled by significant orders and the addition of early new orders that boosted production at Plant 5. Following the trading session on Monday, the total market value of Samsung Biologics and Samsung Epis Holdings totaled 93.7 trillion won, showing an increase of approximately 6.8 trillion won from their market capitalization of 86.9 trillion won before the spinoff.
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Samsung Epis Holdings ended at 438,500 won on Monday, showing a decrease of 28.23 percent from its initial price. The drop in value is seen as a signal from the market that it expects Samsung Bioepis to validate the promise of its assortment of biosimilars, new drugs, and ADCs through actual outcomes. Additionally, the market is looking for evidence of the effectiveness of Samsung Epis Holdings as a pharmaceutical investment platform.