Looking to join the biotech gold rush on Wall Street, Samsung is reportedly lining up a shot at a $1 billion raise for its growing biosimilars development group, a joint venture set up with Biogen as a junior partner in the deal.
The Wall Street Journal got the tip from some insiders on the deal, which is following in step with Samsung’s earlier pronouncement that it expected to spin out Samsung Bioepis in an IPO that would value the operation at close to $7 billion. Citigroup and Goldman Sachs are managing the offering.
Biogen signed on in late 2011, investing $45 million in exchange for a 15% stake in the JV and teaming up on the R&D work. A little more than two years ago Merck–which tried and largely failed to set up its own biosimilars development group – also tied up with Samsung, offering its considerable marketing clout to the endeavor.
This new $1 billion raise is designed to be pumped into the JV’s R&D operations. And it will join a queue of biotechs which have been lining up to jump into a red-hot IPO game, still sizzling in its third year.
Details about the IPO have been bubbling up slowly to the surface for months now. A Korean newspaper broke the news about the offering, which was later confirmed by Samsung. But the big Korean conglomerates are often hard to analyze, with large holdings often in the hands of a few key families. That murky environment for the numbers has made Wall Street more of a barrier than a conduit for major Korean initiatives–a challenge that Samsung will need to confront if it plans to succeed on Nasdaq.
Samsung set out 3 years ago to become a player in the then incipient biosimilars industry, which analysts expect will mushroom into a $35 billion business. And it’s been making steady progress. As FiercePharmaAsia recently reported, Samsung Bioepis successfully concluded a Phase III study for their knockoff of Humira (owned by AbbVie). That followed two other successful Phase IIIs. The group has 6 drugs in the pipeline, with 5 either in Phase III or just completed.
Copycats of Amgen’s Enbrel, J&J’s Remicade and Roche’s Herceptin are all in the works.
By John Carroll