Samsung buys $2.3 bn Bioepis stake from Biogen to end partnership

Samsung Biologics Co. is acquiring a nearly 50% stake in a biosimilar joint venture with Biogen Inc. from the US biotechnology company for $2.3 billion, ending their decade-long partnership.

Biogen has agreed to sell its entire stake in Samsung Bioepis Co., amounting to a 50% stake minus one share, to Samsung Biologics, the companies said on Friday.

Under the terms of the agreement, Samsung will pay Biogen $1 billion by the end of April, and the remaining amount in installments over the next two years.

Samsung said its full ownership of the JV will take effect when its first payment of $1 billion is made.

The deal, initiated at the request of the US company, would effectively end their partnership, which began in 2012 with the launch of the biosimilar JV, in which Biogen invested about 50 billion won ($41 million) for a 15% stake.

At the time, the US biotech company also had the right to purchase up to 50% less one share of Samsung Bioepis, and exercised the right in June 2018, bringing its total investment to 810 billion won.

With the latest deal, Biogen will be making about 2 trillion won in gains by cashing out its biosimilar interest after 10 years of its purchase.

Following the close of the deal, the two companies will continue with their exclusive agreements, including the commercialization of their current portfolio.

“Even after the end of the JV, we’ll closely work with Biogen,” said a Samsung Biologics official.

To finance the deal, Samsung Biologics said it will raise 3 trillion won via a rights offering to existing shareholders.

SAMSUNG TO DEVELOP NOVEL THERAPEUTICS

For Samsung Biologics, the deal is expected to accelerate its push for expansion in the development of novel therapeutics as well as biosimilars – a move that is in line with Samsung Group’s strategy to foster the bio business as its second cash cow following semiconductors, led by Samsung Electronics Co.

Last year, Samsung Group said it will invest a total of 240 trillion won, or $206 billion, over the next three years, in its core businesses such as semiconductors, displays and biopharmaceutical products.

Industry watchers said Samsung Biologics and Biogen have maintained uneasy relations under the biosimilar JV as they could eventually turn rivals in various areas, including the development of new drugs.

The two companies’ joint ownership of Bioepis has posed a stumbling block to the biosimilar company’s efforts to advance into fields overlapping those of Biogen.

As part of efforts to settle the tricky issue, Samsung was once considering taking over Biogen instead of purchasing the US firm’s stake in the JV, industry sources told The Korea Economic Daily last month.

“Their relationship, in a way, has been uncomfortable. Now that they are ending the JV, Samsung is expected to actively embark on new drug development projects, let alone the biosimilar and CMO businesses,” said an industry official.

M&As IN mRNA, CELL & GENE THERAPIES

Samsung Bioepis has successfully launched five biosimilars globally – three in the autoimmune sector and two in oncology. Additionally, one product is about to be released in the market, with four biosimilars in phase 3 trials, according to the company.

Once wholly owned by Samsung Biologics, the biosimilar drugmaker will also be able to produce new therapeutics with improved autonomy and agility, it said.

Samsung Biologics, the biotech arm of Samsung Group, is one of the industry’s leading contract drug manufacturers.

Under a contract development and manufacturing organization (CDMO) scheme, Samsung Biologics has been working as Moderna Inc.’s Asian production base, making its COVID-19 vaccine for use in Korea and other countries.

Samsung Biologics is currently building its fourth plant in Songdo, near Seoul. Once completed, the company will have a bioreactor capacity of 620,000 liters, making it the world’s largest CMO facility in a single location.

The company said it will begin construction of its fifth plant, which will offer multimodal product services, in Songdo by the end of this year.

“We’ll actively look for new growth opportunities through M&As in areas such as mRNA and cell and gene therapies,” said a Samsung executive.

Write to Jae-young Han at jyhan@hankyung.com
In-Soo Nam edited this article.