Samsung BioLogics shares hit record-high, making it Kospi’s 3rd most valuable firm

Shares of Samsung BioLogics, a contract drug manufacturer under South Korea’s Samsung Group, hit an all-time high of 600,000 won ($564) on Tuesday morning, following news reports suggesting that the electronics giant is increasing direct stakes in its biopharma subsidiaries.

It marks a 341 percent jump from the firm’s initial offering price of 136,000 won set at the time of its initial public offering in November 2016.

With the recent share price hike, Samsung BioLogics has become the third-largest company traded on the Kospi, as its market capitalization of 38.3 trillion won now exceeds that of Korea’s biotech powerhouse Celltrion.

Investor expectations for Samsung BioLogics took a major leap after the news that Samsung C&T, the de facto holding company of Samsung Group, was considering to raise up to 3 trillion won to purchase a 30 percent stake in Samsung Bioepis, a subsidiary of Samsung BioLogics.

According to sources cited by local TV broadcaster MBC, Samsung C&T has been contacting large financial institutions to discuss raising new capital for the acquisition, a move that shows that Samsung is expanding its main business focus to include biotechnology in addition to chipmaking.

Samsung C&T responded with a statement Tuesday, saying that despite “reviewing various measures to secure growth engines for the future,” it is “not planning at the moment to buy a stake in Samsung Bioepis.”

Shares of Samsung BioLogics closed at 583,000 won Tuesday, up 3.74 percent from the previous day. Meanwhile, Samsung C&T shares closed at 144,000 won, up 3.97 percent from Monday.

Currently, Samsung Bioepis is jointly owned by Samsung BioLogics and US-based Biogen, with the former owning a 94.6 percent stake and the latter owning 5.4 percent. However, Biogen has the right to exercise a “call option,” effective until the end of 2018, to increase its stake in Samsung Bioepis to up to 49.9 percent.

Samsung BioLogics’ shares were also buoyed by positive business outlook for its subsidiary Samsung Bioepis, which primarily develops and sells biosimilars. Biosimilars are cheaper, near-replicas of cell-based biologic drugs whose patents have expired.

Last week, Samsung Bioepis settled a lengthy patent dispute with US-based AbbVie, the maker of the world’s best-selling biologic Humira. Under the agreement, Samsung Bioepis can launch its Humira-referencing biosimilar in Europe from October 2018 onward and in the US, if approved, from June 30, 2021 onward.

So far, Samsung Bioepis has obtained marketing approval for four biosimilars in Europe, referencing Enbrel, Remicade, Herceptin and Humira, respectively. A follow-on biologic version of Sanofi’s Lantus, developed with partial funding from Samsung Bioepis, has also secured Europe’s approval.

In the US, the firm’s Remicade biosimilar has been approved and made available in the market. The US Food and Drug Administration has also tentatively approved Merck & Co. and Samsung Bioepis’ Lantus copy.

By Sohn Ji-young (jys@heraldcorp.com)