Samsung Biologics has thrown its hat into the rapidly growing global obesity treatment market, committing 2.7 trillion won (approximately $1.8 billion) to acquire Swiss peptide contract development and manufacturing organization (CDMO) PolyPeptide Group. This represents the largest merger and acquisition in South Korea’s pharmaceutical and biotech industry history—a strategic move to expand a business structure centered on antibody drugs into the production of raw materials for obesity treatments, the next major growth driver.

Samsung Biologics disclosed on the 20th that its board of directors approved a contract to acquire a 100% stake in PolyPeptide Group for 1.46 billion Swiss francs (approximately 2.7 trillion won). The company plans to finalize the acquisition by year-end through a major shareholder stake purchase and a public tender offer. This marks Samsung Group’s largest M&A deal since Samsung Electronics acquired Harman for 9 trillion won in 2017.

Targeting the Obesity Drug Market… A Portfolio Transformation

The core of this acquisition lies in dramatically expanding Samsung Biologics’ business portfolio, previously concentrated on antibody drugs, into the peptide sector. Peptides are short chains of amino acids that function as messengers, transmitting hormones and signals between cells within the body. They serve as the key raw material for glucagon-like peptide-1 (GLP-1) class obesity and diabetes treatments, for which global demand has surged recently. Eli Lilly’s Mounjaro and Novo Nordisk’s Wegovy are prime examples.

PolyPeptide Group is a peptide CDMO specialist headquartered in Baar, Switzerland, spun off from global pharmaceutical company Ferring in 1996. The company holds a track record of over 1,000 peptide therapeutic development and production projects and operates six manufacturing sites and R&D centers across five countries, including Europe, the U.S., and India. It also employs approximately 1,500 skilled professionals.

“This acquisition is a strategic decision encompassing all three of Samsung Biologics’ growth pillars: production capacity, business portfolio, and global footprint,” said John Rim, CEO of Samsung Biologics. “It will contribute to enhancing corporate and shareholder value.”

A Strategic Bet on a $190.5 Billion Market

Samsung Biologics’ M&A move is interpreted as a play to preempt the explosively growing obesity treatment market. Morgan Stanley projects the global obesity treatment market could expand to as much as $190 billion (approximately 281 trillion won) by 2035. Goldman Sachs similarly estimates the market could reach up to $150 billion (approximately 222 trillion won) within a comparable timeframe.

The rapid growth of the obesity treatment market directly translates into increased demand for contract manufacturing of peptides, the core raw material. According to market research firm Business Research Insight, the global peptide CDMO market is projected to grow at a compound annual rate of 20.3%, from $5.52 billion in 2026 to $29.14 billion by 2035.

Notably, peptide production involves complex processes and stringent quality control, creating high barriers to entry. As a result, more than six out of ten global pharmaceutical companies outsource production to CDMOs rather than manufacturing in-house. Through this acquisition, Samsung Biologics has secured an immediate foundation to enter this high-growth market.

The Hidden Catalyst: Eli Lilly

Industry observers are focusing on a “major catalyst” hidden within the acquisition details. Samsung Biologics’ board meeting minutes reportedly cite “securing relationships and pipelines with key clients, including Eli Lilly,” as an acquisition benefit. Lilly is currently the manufacturer of Mounjaro and Zepbound, which dominate the global obesity and diabetes treatment market. Given the high likelihood that PolyPeptide already maintains a transactional relationship with Lilly, analysts suggest the probability has increased that Samsung Biologics could secure large-scale obesity drug production volumes from Lilly post-acquisition.

“Samsung Biologics’ expansion from cell-based biopharmaceutical CDMO into the chemical-based peptide domain will serve as a new milestone for South Korea’s biotech industry,” assessed Lee Seung-gyu, Vice Chairman of the Korea Biotechnology Association.

Global Manufacturing Footprint Expansion… Addressing Supply Chain Risks

The acquisition also carries significant weight in terms of global manufacturing footprint expansion. Samsung Biologics’ production and research infrastructure, previously limited to Incheon’s Songdo district and Rockville, U.S., will now extend across Europe and Asia, including Sweden, Belgium, France, and India. This is expected to provide a foundation for flexible responses to global supply chain risks, including U.S. tariffs.

Samsung Biologics will assume PolyPeptide’s existing CDMO contracts, securing stable order volumes immediately post-acquisition. Furthermore, cross-selling opportunities are expected to expand for global pharmaceutical companies simultaneously developing antibody drugs and peptide therapeutics.

Chairman Lee Jae-yong’s ‘Biotech Legend’ Takes Shape

This acquisition is interpreted as reflecting the determination of Samsung Electronics Chairman Lee Jae-yong to cultivate biotech as a “second semiconductor.” In 2023, Chairman Lee met successively with global pharmaceutical companies, emphasizing, “Bold and persistent challenges determine victory or defeat. Let us carry the success DNA of semiconductors into a biotech legend.” In February 2024, he personally visited Samsung Biologics’ Incheon campus, urging, “Do not be satisfied with current results; let us challenge more boldly.”

“Large-scale M&A investment decisions require the decisive commitment of the head of a conglomerate, so the current juncture, with judicial risks resolved, appears to be a favorable situation for large-scale investment,” analyzed Chung Yeon-seung, Professor of Business Administration at Dankook University. Indeed, Samsung has been accelerating large-scale investments, successively closing trillion-won-level M&A deals, including the acquisition of German HVAC company FläktGroup for approximately 2.4 trillion won in May last year.

Financial Burden and Post-Acquisition Challenges

However, financial burden and post-acquisition integration are cited as challenges to address. As of the end of the first quarter, Samsung Biologics’ cash mobilization capacity—combining cash, cash equivalents, and short-term financial instruments—stood at 1.62 trillion won, falling short of the acquisition price (approximately 2.7 trillion won) by about 1.1 trillion won (approximately $745.5 million). The company stated it plans to finance a portion of the tender offer through borrowings. On the day of the announcement, Samsung Biologics shares closed down 3.65% at 1.345 million won.

“Successfully integrating the two companies without losing key talent and technology before the acquisition closes is a critical task,” said a biotech industry source. Peter Wilden, Chairman of the Board of PolyPeptide Group, emphasized, “Combining Samsung Biologics’ overwhelming production capacity and operational expertise will secure a firm competitive advantage in the global peptide CDMO market.”