---
endpoint: analytics
pattern: Healthcare
status: done
latency_ms: 170590
conversation_id: 33b7c9f8-d8f8-4920-b0e3-21008411e044
citations: 7
created: 2026-05-31 19:55:35Z
---

# What is Samsung Biologics’s core business franchise and the key components of its operating model?

# Samsung Biologics (207940 KS) — Core Business Franchise & Operating Model

## 1. Core Business Franchise

Samsung Biologics (SBL) is a **pure-play biopharmaceutical Contract Development & Manufacturing Organization (CDMO)** serving global pharma. Following the May 2025 horizontal corporate split, the surviving listed entity (SBL) houses **only the CDMO franchise**, while the biosimilar arm (Samsung Bioepis) was moved to a newly created holding company, **Samsung Epis Holdings (SEH)**, to remove perceived conflicts of interest with CDMO clients [8][12]. CLSA notes the rationale explicitly: the **contract-based CDMO model and the development-driven biosimilar model are different business archetypes**, and conflating them was hindering proper valuation and client wins [9].

The CDMO franchise itself is structured around three revenue streams:

| Service Line | What It Is | Status (Q1'26) |
|---|---|---|
| **CMO** (Contract Manufacturing) | Drug Substance (DS) + Drug Product (DP) manufacturing of monoclonal antibodies and other biologics for global pharma | **112 cumulative CMO projects**, US$21.4bn cumulative CMO contract value [3] |
| **CDO** (Contract Development) | Cell line, process and formulation development services that funnel into CMO downstream | **169 cumulative CDO projects** [3] |
| **New modalities / adjacencies** | Antibody-Drug Conjugates (ADC GMP batches), mRNA Master Cell Bank (MCB) production, vector construction | Recently launched, ramping [2] |

SBL has been recognized with **CDMO Leadership Awards for 13 consecutive years**, signaling sustained top-tier industry positioning [2]. It also has a quality-regulatory moat — **53 FDA, 59 EMA and 442 "Others" cumulative CMO product approvals** as of Q1'26 [3] — which is the gating asset for global pharma to outsource commercial-stage biologics.

---

## 2. Key Components of the Operating Model

### 2.1 Multi-Plant Mega-Capacity Manufacturing Backbone (Songdo, Korea)

SBL's economic engine is a stair-stepped capacity-build model: each new mega-plant unlocks the next revenue leg, with utilization curves that take ~3-4 years to fill.

CLSA-tracked plant utilization trajectory [13]:

| Quarter | Plant 1 | Plant 2 | Plant 3 | Plant 4 | Plant 5 |
|---|---|---|---|---|---|
| 1Q24 | 85% | 86% | 87% | 42% | 0% |
| 1Q25 | 85% | 86% | 87% | 80% | 0% |
| 1Q26 | 85% | 86% | 87% | 86% | 30% |
| 3Q26E | 85% | 86% | 87% | 86% | 50% |

In the Q1'26 earnings release, management confirmed **"full operation of Plants 1 to 4" with Plant 5 in ramp-up**, driving Q1'26 revenue to KRW 1,257bn (+26% YoY) at 46.2% operating margin and 53.7% EBITDA margin [1]. CLSA expects **Plant 6 construction announcement to be the next major catalyst** following Plant 5's ramp [11].

### 2.2 Dual-Site Global Manufacturing Footprint (Korea + US)

In 2025-26 SBL transitioned from a single-site (Songdo) operator to a **global dual-site CDMO** via the **acquisition of a US plant in Rockville, Maryland** [4]:

- **Acquisition cost:** US$353M ($280M plant + $73M inventory/spare parts)
- **Capacity acquired:** 60 kL (2× 20 kL + 2× 10 kL)
- **Workforce retained:** 500+ employees
- **Pre-secured volumes:** GSK as anchor client
- **Scalable to 100 kL** on-site, with potential further M&A / greenfield expansion in North America [5]

This adds **client-proximity** (key for US biotech and big pharma) and **agile response to global demand dynamics** [4] — a strategic answer to tariff/onshoring pressures and Wuxi/BIOSECURE-related order rotation.

### 2.3 Contract-Driven, Long-Cycle Revenue Model

The operating model is **fundamentally contract-based with multi-year, multi-billion-dollar take-or-pay characteristics**:

- Cumulative CMO contract value: **US$7.5B (2021) → US$21.4B (Q1'26)** — nearly a 3x build in 5 years [3]
- The 2026 revenue guide is **+15-20% YoY** (vs. KRW 4,557bn in 2025), supported by full Plants 1-4 plus Plant 5 ramp [7]
- 27 consecutive quarters of YoY revenue growth as of Q1'26 [1]

CLSA notes the near-term order momentum thesis is built on **Plant 5 ramp-up** evidenced by recent orders worth KRW 440bn, with Plant 4 driving the earnings beat trajectory [11].

### 2.4 Ecosystem & Partnership Strategy

The model extends beyond capacity-rental into a **biopharma ecosystem play** [6]:

- **Open Innovation Center** with Eli Lilly (Lilly Gateway Labs) — startup/academic/big-pharma incubation, generating future CDMO funnel
- **CEPI Network** partnership — reserve manufacturing capacity for vaccine production in global health emergencies, positioning SBL beyond commercial CDMO into public-health infrastructure
- New-modality expansion (ADC, mRNA, vector construction) to secure the mid-to-long-term growth engine [2]

### 2.5 Client-Conflict-Free Pure-CDMO Structure (Post-Split)

CLSA argues that **removing the biosimilar arm is itself an operating-model upgrade**: the Bioepis firewall costs are eliminated, and SBL can now bid for **clients previously off-limits** due to coopetition concerns — specifically calling out **Amgen and Regeneron** as new addressable accounts [10]. This widens the addressable client roster meaningfully versus the pre-split structure.

---

## 3. Operating Economics Summary

The model converts capacity into operating leverage — once a plant fills, incremental revenue carries near-50% operating margins:

| Metric | Q1'25 | Q1'26 | YoY |
|---|---|---|---|
| Revenue (KRW bn) | 1,000 | 1,257 | +26% [1] |
| Operating Profit (KRW bn) | 430 | 581 | +35% [1] |
| Op. Margin | 43.0% | 46.2% | +320bps [1] |
| EBITDA Margin | 51.5% | 53.7% | +220bps [1] |

---

## 4. Summary

SBL's franchise = **a pure-play, top-tier global biologics CDMO** [2], post-split structurally cleaner of client-conflict overhangs [10]. The operating model rests on **five legs**:

1. **Sequential mega-plant capacity builds** in Songdo (Plants 1-4 full, Plant 5 ramping, Plant 6 pending) [11][13]
2. **Dual-site global footprint** with the Rockville (Maryland) US acquisition adding 60 kL — scalable to 100 kL [4][5]
3. **CMO + CDO + new-modality** service stack (mAbs, ADC, mRNA, vectors) with US$21.4B cumulative contracted backlog [2][3]
4. **Ecosystem partnerships** (Lilly Gateway Labs, CEPI) widening the deal funnel and brand [6]
5. **Pure-CDMO governance** post Samsung Epis Holdings split, unlocking previously-conflicted accounts (Amgen, Regeneron) [9][10]

The result: a high-margin (mid-40s OPM, mid-50s EBITDA margin), order-backlog-visible, capacity-led growth story aiming for **+15-20% revenue in 2026** [7].

---

**Sources**

[1] Samsung Biologics Q1 2026 Earnings Release — Key Takeaways (slides, 22 Apr 2026)
[2] Samsung Biologics Q1 2026 Earnings Release — Business Expansion / CDMO highlights (slides, 22 Apr 2026)
[3] Samsung Biologics Q1 2026 Earnings Release — Contract & Approval Status (slides, 22 Apr 2026)
[4] Samsung Biologics Q1 2026 Earnings Release — Rockville US Plant Acquisition / Dual-site Network (slides, 22 Apr 2026)
[5] Samsung Biologics Q1 2026 Earnings Release — 60kL → 100kL Scalable Infrastructure (slides, 22 Apr 2026)
[6] Samsung Biologics Q1 2026 Earnings Release — Global Partnership Expansion (Lilly Gateway Labs, CEPI) (slides, 22 Apr 2026)
[7] Samsung Biologics Q1 2026 Earnings Release — Revenue Guidance Table (slides, 22 Apr 2026)
[8] Samsung Biologics – HC O-PF (Entering a new phase) — CLSA (22 May 2025) — 607960304LinqAlpha.PDF
[9] Samsung Biologics – HC O-PF (Making the right decision) — CLSA (27 May 2025) — Q&A on spin-off rationale — 607960664LinqAlpha.PDF
[10] Samsung Biologics – HC O-PF (Making the right decision) — CLSA (27 May 2025) — Benefiting minorities / Amgen-Regeneron — 607960664LinqAlpha.PDF
[11] Samsung Biologics – HC O-PF (Making the right decision) — CLSA (27 May 2025) — Solid CDMO fundamentals — 607960664LinqAlpha.PDF
[12] Samsung Biologics – HC O-PF (Entering a new phase) — CLSA (22 May 2025) — Spin-off Overview Table — 607960304LinqAlpha.PDF
[13] Samsung Biologics – HC O-PF (Making the right decision) — CLSA (27 May 2025) — Plant utilization trajectory Figure 20 — 607960664LinqAlpha.PDF

## Citations

- [1] **Samsung Biologics Co.,Ltd., Q1 2026** · external
- [2] **Samsung Biologics Co.,Ltd., Q1 2026** · external
- [3] **Samsung Biologics Co.,Ltd., Q1 2026** · external
- [4] **Samsung Biologics Co.,Ltd., Q1 2026** · external
- [5] **Samsung Biologics Co.,Ltd., Q1 2026** · external
- [6] **Samsung Biologics Co.,Ltd., Q1 2026** · external
- [7] **Samsung Biologics Co.,Ltd., Q1 2026** · external

