April 26, 2024

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[THE INVESTOR] Biogen has confirmed that it will make an additional investment worth 400 billion won (US$370 million) in Samsung Bioepis, a biosimilar developer and a joint venture between Samsung BioLogics and the US biotech.

“In the coming months, we plan to exercise our option to increase our equity stake in the Samsung Bioepis JV. We believe this an attractive value-creation opportunity,” Biogen CFO Jeffrey D. Capello said during an earnings conference call held on April 24. 

Currently, Samsung BioLogics and Biogen hold 94.6 percent and 5.4 percent stake in Samsung Bioepis, respectively. Biogen has a call option that allows it to increase its stake in the JV up to 49.9 percent by the end of this year.

The option enables Biogen to buy Samsung Bioepis stock at a 50,000 won (US$46.3) strike price to make additional investment worth 400 billion won into the Suwon-based firm.

Although the share purchase plan was widely expected, investors have been paying keen attention to Biogen’s decision as Samsung Group could seek to strengthen its grip on the biosimiliar maker if Biogen rules out the option as the conglomerate is looking at its biopharmaceutical business as a future growth engine.

Industry watchers said Biogen’s move to increase its position could lead to active management engagement such as potential personnel changes on the board of Samsung Bioepis but Capello didn’t directly comment on such plans.

“As it relates to exercising the call option, it is an equity investment we’re making. It would still be below the level that would require us to consolidate. So it would be an equity investment where we would just pick up their share or our share of net profits with regard to that collaboration,” he told analysts.

Founded in 2012, Samsung Bioepis has been catching up with the fast growing biosimilar market, having six late-stage candidates that cover the therapeutic areas of immunology, oncology and diabetes, including its version to Enbrel, Herceptin and Humira. Among them, five biosimilar drugs have been approved in Europe and one in the US.

By Park Han-na (hnpark@heraldcorp.com)