Korea’s Samsung Bioepis seeks to buy U.S. Biogen’s biosimilar unit

Samsung Bioepis Co. headquarters in Songdo. [Courtesy of Samsung Bioepis]

Samsung Bioepis Co., a biopharmaceutical research and development unit under South Korea’s Samsung Group, is seeking to acquire the biosimilar business unit of U.S. pharmaceutical giant Biogen Inc., with an aim to increase the profitability of its biosimilar business by absorbing Biogen‘s global sales network and establishing a direct sales system.

According to investment banking and bio industry sources on Monday, Samsung Bioepis recently formed a task force to acquire the biosimilar division of Biogen and completed due diligence on the unit. “At this time, nothing has been finalized regarding the acquisition of Biogen’s biosimilar business unit,” said an unnamed Samsung Bioepis official.

Earlier this year, Biogen put its biosimilar division up for sale to focus on developing new drugs, including Alzheimer’s disease treatment Leqembi. The company is said to have tapped New York-based Evercore Inc. as its financial advisor for the sale process.

The main driving factor behind Samsung Bioepis’ pursuit of this acquisition is to improve the profitability of its biosimilar division. Although the company has launched seven biosimilars in the global market, it has not been able to increase profitability significantly due to the lack of a local direct sales system. This is evidenced by the fact that its operating profit fell by 28 percent in the second quarter of this year from the same period a year ago, while sales rose by 10 percent.

Samsung Bioepis has been selling its products in the U.S. and Europe primarily through Biogen, and splits profits with the U.S. company. For this reason, analysts see that Samsung Bioepis is the most likely candidate among potential buyers. The exact value of the acquisition has not been finalized, but it is estimated to be in the hundreds of billions of won.

If this acquisition and merger (M&A) deal is finalized, Samsung Bioepis will secure approximately 300 global sales professionals, which is expected to lead to a significant improvement in the company’s sales and profitability by eliminating the need for a separate middleman. Last year, Biogen‘s biosimilar division generated $751 million in revenue.