Sector News

Samsung buys Biogen out of biosimilar unit for $2.3B—not the whole Aduhelm headache

January 29, 2022
Life sciences

A recent report from Korea buzzed a Biogen takeover by Samsung. Turns out, Samsung is indeed buying something of Biogen’s, just not the entire company that’s saddled with the Alzheimer’s disease drug launch trouble.

Samsung Biologics, the biotech contract manufacturing arm of Samsung, will acquire Biogen’s stake in their biosimilar-focused Samsung Bioepis joint venture for up to $2.3 billion.

Nothing much is changing for Biogen, except a decrease in profit share from the biosimilar portfolio. Its exclusive commercialization agreements covering four approved biosimilar products and a pipeline candidate remain unchanged. But the move suggests an outright Biogen buyout isn’t likely to happen anytime soon, Jefferies analyst Michael Yee said in a note to clients.

Biogen’s stock price has been under pressure lately as the company navigates the challenging launch of Alzheimer’s therapy Aduhelm. An unfavorable draft reimbursement policy, released earlier this month, threatens to limit Aduhelm’s Medicare coverage to just a few thousand patients in clinical trials. The gloomy stock performance has made Biogen vulnerable to a takeover.

During a conference call a few days ago, CEO Michel Vounatsos said Biogen management was working closely with its board on “tactical short-term measures but also strategic options.” The company has recently launched a $500 million cost-cutting scheme after slashing Aduhelm’s price in half.

The biosim transaction will give Biogen additional cash that could be deployed for dealmaking, Yee figures. After speaking with Biogen’s exec team, Yee noted the company could have about $10 billion in M&A firepower, without throwing in any equity—though he argued Biogen wouldn’t go that big.

Biogen apparently does remain committed to the biosim portfolio. Samsung Bioepis’ marketed products include biosims to three blockbuster TNF inhibitors, namely AbbVie’s Humira, Amgen’s Enbrel and Johnson & Johnson’s Remicade. Biogen is currently responsible for selling these copycats in Europe, with an option to handle the China market. Together, these meds brought Biogen $610.2 million in the first nine months of 2021, up 2% year over year.

Through separate deals, Biogen also holds rights to Samsung Bioepis’ biosims to two anti-VEGF eye treatments—Regeneron and Bayer’s Eylea and Roche and Novartis’ Lucentis—for major markets worldwide. The joint venture also has two marketed oncology biosims referencing Roche’s Herceptin and Avastin through a collaboration with Organon, a recent spinoff from Merck & Co.

Biogen initially contributed $45 million for a 15% stake to establish Samsung Bioepis in 2012. Then, in 2018, the U.S. company exercised an option to beef up its holding to 50% less one share for nearly $700 million.

Now, Samsung will pay Biogen $1 billion at deal closing and $1.25 billion over two years. An additional $50 million payment is conditioned upon achieving certain commercial milestones.

Given that Biogen retains the marketing rights, it will continue to report revenues for the portfolio. But under a 50-50 profit sharing agreement Biogen has with Samsung Bioepis, bowing out of the franchise means Biogen is giving up the 25% of profits it would derive from its share in the joint venture.

For Samsung Biologics, the Korean CDMO said gaining full control gives Samsung Bioepis “improved autonomy and agility in business operations.”

by Angus Liu


comments closed

Related News

September 25, 2022

Rise of the machines: Novo Nordisk pledges $200M to create first quantum computer for life sciences

Life sciences

Big Pharma has long seen the potential for AI and machine learning to accelerate drug development. But Novo Nordisk is going a step further by channeling $200 million toward the creation of a computer that will outrun anything in existence.

September 25, 2022

Mount Sinai AI uncovers new brain analysis method to predict dementia, Alzheimer’s disease

Life sciences

Current methods for diagnosing Alzheimer’s disease rely on a complex combination of self- and caregiver-reported symptoms, a physical examination and either a PET scan or a spinal tap to look for evidence of amyloid plaque build-ups in the brain. But a new artificial intelligence-based method may make the diagnostic process a much more objective one.

September 25, 2022

New AstraZeneca-backed report finds big money behind diverse owners and entrepreneurs in Europe

Life sciences

There is lots of talk about diversity and inclusion in business, including in pharma and medtech. A new report by the Open Political Economy Network (OPEN), a think tank focusing on migration and diversity, released its “Minority Businesses Matter: Europe” report highlighting the successes and challenges of ethnic minority-owned businesses in Europe.