Samsung Biologics (207940.KS) has agreed to acquire a global peptide contract development and manufacturing organization (CDMO) for 2.7 trillion won, the largest deal ever in Korea's pharmaceutical and biotech industry, but its shares are trading lower in early trading. While the move is viewed positively for securing long-term growth momentum, the short-term burden of the large investment has come into focus, prompting profit-taking sales, analysts said.
According to the Korea Exchange, Samsung Biologics was trading at 1.37 million won as of 9:49 a.m. on the 20th, down 26,000 won, or 1.86%, from the previous session. The stock opened at 1.428 million won but later turned lower, falling as much as 1.367 million won.
Samsung Biologics announced in a regulatory filing that it signed a contract to acquire a 100% stake in PolyPeptide Group AG, a global peptide CDMO headquartered in Switzerland. The acquisition price is 1.46 billion euros (approximately 2.7061 trillion won), the largest merger and acquisition (M&A) in the history of Korea's pharmaceutical and biotech industry.
The company held a board meeting on the 17th of this month and approved the agenda to acquire 33,016,411 shares of PolyPeptide Group. It plans to establish a local subsidiary to first acquire the 55.65% stake held by the largest shareholder, then conduct a tender offer for the remaining shares excluding treasury stock. The acquisition process is expected to be completed in December this year.
PolyPeptide Group is a company spun off from the peptide business division of global pharmaceutical firm Ferring in 1996, and is a global peptide CDMO that operates production facilities mainly in Europe and the United States. Through this acquisition, Samsung Biologics will expand its business into the peptide drug field, where demand has surged recently along with the expansion of the obesity and diabetes treatment market. The market analyzed that while the acquisition is positive in terms of mid- to long-term growth potential, sales emerged in the short term amid concerns over the funding burden.
