Biogen Paying $650m to Up Stake in Samsung Bioepis

Biogen has opted to increase its control in biosimilar venture Samsung Bioepis to 49.5%, according to partner Samsung BioLogics.

Image: Getty/Duncan_Andison

Biogen sent South Korean biomanufacturer Samsung BioLogics a letter last week declaring its intention to increase its stake in the firms’ joint venture Samsung Bioepis from 5.4% to 49.5%.

According to Samsung BioLogics, Biogen will pay around 700 billion Won (US$650 million) for an additional 44.6% stake in the JV, with the deal expected to take two to three months to complete.

“After the exercise of the call option, as Samsung Biologics will control ‘50% + 0.5 shares’ (currently 94.6%) and Biogen will control ‘50% – 0.5 shares’ the Board of Directors will be divided into two groups and the Representative Director will be nominated.”

Biogen did confirm the deal when contacted by BioProcess Insider but told us the option to purchase additional stock was part of the agreement forged in February 2012 when the joint venture with Samsung Biologics was established.

The company added: “If we do not exercise this option by mid-2018, this option will expire and Samsung Biologics will have the right to purchase all of Samsung Bioepis’ shares then held by us.”

‘Accretive Value Creation’

Biogen has, however, been vocal in its desire to up its stake.

“In the coming months we plan to exercise our option to increase our equity stake in the Samsung Bioepis joint venture,” Biogen CFO Jeff Capello said in a financial call in April. “We believe this is an attractive value creation opportunity.”

Since its inception in 2012, Samsung Bioepis has become one of the most successful biosimilar developers. It has European approval for versions of Enbrel (etanercept), Remicade (infliximab), Humira (adalimumab), Lantus (insulin glargine), and Herceptin (trastuzumab).

The JV’s infliximab biosimilar, Renflexis, is one of only a handful of biosimilar products approved and launched in the US.

For the first quarter 2018, biosimilars generated $128 million for Biogen, nearly double the same period in the previous year.

Samsung BioLogics is currently being investigated by South Korea’s Financial Supervisory Service (FSS) over allegations of accounting fraud. In a response, the contract development and manufacturing organization (CDMO) said it changed its financial reporting schedule in 2015 due to Biogen’s potential share option.