Samsung Bioepis likely to delay Nasdaq debutMadeinkoreablog
Samsung Group’s biosimilars unit is likely to delay its public listing on the Nasdaq, originally scheduled for the first half of this year, industry sources said Tuesday.
Samsung Bioepis, which develops biosimilars — cheaper near-replicas of brand-name biologic drugs — had sought to raise up to 2 trillion won ($1.7 billion) through the initial public offering to pour more resources into research and development activities.
According to news reports and sources, however, the company is unlikely to pursue its debut on the world’s second-largest stock exchange this year, possibly due to the volatile U.S. biotechnology market and its own patent disputes.
The company declined to comment on the exact timing of the planned IPO, citing corporate compliance regulations linked to the Nasdaq entry process.
“In order to maximize value creation for our company, we are currently evaluating U.S. market conditions to determine the optimal timing of our IPO,” a company official said.
In June last year, the company announced plans to list on the Nasdaq, hiring four banks — Citigroup, Goldman Sachs, Credit Suisse and Morgan Stanley — to manage the process.
Industry analysts had forecast the company would be valued at around 8-10 trillion won and list 10 to 20 percent of its shares.
Analysts say a pending legal dispute with U.S.-based pharmaceutical giant Amagen in Canada could be one of the factors affecting Bioepis’ IPO plan.
Amgen sued Bioepis in July 2015 alleging that the Korean drugmaker breached two unexpired patents related to its blockbuster arthritis drug Enbrel (etanercept) by attempting to begin selling its Enbrel biosimilar in Canada.
“Samsung Bioepis is likely trying to wrap up its dispute with Amgen, even if it takes time, to drive up its market value in the eyes of investors,” said a local biopharma analyst who wished to remain anonymous, due to the sensitivity of the matter.
The volatility of the U.S. biotech stock market and a slowdown of the segment have also been cited as important factors influencing the timing of Bioepis’ IPO.
The Nasdaq Biotechnology Index, weighted by the market value of the listed biotech companies such as Amgen and Illumina, has been continuously declining since its peak in July last year. It has dropped by about 17 percent in the first two weeks of 2016.
U.S. presidential hopeful Hillary Clinton has also been pushing for lower drug prices as a major part of her election campaign, alarming the global biopharma sector.
In September 2015, Clinton’s tweet about “price gouging” in the specialty drug market sent U.S. biotech stocks tumbling, knocking the Nasdaq into the red.
Yet, analysts attribute the downturn of the NBI to a decline in the broader market, rather than declining prospects of biotech firms or new drug development — a costly and lengthy process which could take up to a decade.
The local biopharma analyst said the U.S. biopharmaceutical market is “fundamentally solid” and unshrinking, as new biotech drugs are continually undergoing active development and hold significant market potential globally.
“Reaching some kind of a conclusion on the dispute with Amgen is probably the bigger consideration for Bioepis now,” he said, adding the firm may push for the IPO within this year, given the “urgency of the deal.”
Meanwhile, other company watchers have even raised the possibility that Samsung Bioepis could turn away from the Nasdaq and turn instead to Korean stock markets in the future.
“Given the difficulties faced in listing on the Nasdaq, Bioepis may have shifted its direction to the Korean stock market,” a Samsung official close to the matter said.
“KOSPI (Korea’s main bourse) would be the preferred option, but it may be pushed instead to pursue a listing on the KOSDAQ (the secondary Korean bourse),” given negative public perceptions about conglomerates’ economic dominance.