SEOUL Samsung Biologics Co Ltd, a contract manufacturer of biotech drugs for global pharmaceutical firms, said it was planning an IPO this year, an offering that analysts have estimated as being worth as much as $2.6 billion.The IPO is aimed at helping fund an ambitious expansion in production capacity to make it the world’s largest contract manufacturer. It plans to pick advisers for the offering in May, amid a likely record year for Seoul IPOs.Founded in 2011, Samsung Biologics has the third-largest capacity among global contract manufacturers and counts Roche Holding AG (ROG.S) and Bristol-Myers Squibb Co (BMY.N) among its clients.Analysts have estimated the company’s potential market value at 10 trillion won ($8.7 billion) or more, and the offering size at around 2-3 trillion won. Biotech drugs, which are complex molecules generated by living cells, accounted for seven of the world’s ten best-selling drugs in 2015.
The global market for biotech drugs is expected to grow to $278 billion in 2020, up 52 percent from 2015 levels, according to data provider Evaluate Pharma, as aging populations in many countries fuel demand for medicine.Samsung Biologics is 51 percent owned by Samsung C&T Corp (028260.KS), the de facto holding company of Samsung Group [SAGR.UL]. Samsung Electronics Co Ltd (028260.KS) is the second-largest shareholder with a 46.8 percent stake.
The company owns 91 percent of Samsung Bioepis Co Ltd, an unlisted developer of biosimilar drugs, or copies of biotech drugs.Seoul is expecting a bumper year in IPOs on a stocks revival and conglomerate needs to streamline structures, smooth paths toward management succession or ease debt burdens. Bankers expect this year’s proceeds to be at least $10 billion, eclipsing 2010’s high of $8.5 billion.Samsung Biologics last year said it would build an additional 180,000 liter plant, bringing combined investment in production lines for the 2011-2018 period to 2 trillion won.
(Reporting by Joyce Lee; Editing by Edwina Gibbs)Download