Expectations and Concerns
As Samsung BioLogics, the contract drug manufacturing unit of Samsung Group, is about to go public, there expectations and concerns over the role of Samsung in the bio industry at the same time. Some have a positive outlook that the domestic bio industry will take a leap forward as global leading Samsung will inject trillions of won. On the other hand, other express concerns that Samsung is focusing on the contract manufacturing organization (CMO) business and biosimilar by easily attracting market funds, rather than using its own funds.
Shares of Samsung BioLogics will be offered for sale to individual investors for two days from November 2, as the South Korean contract drug manufacturer prepares to go public on Korea’s main bourse on Nov. 10. The company has priced its shares at 136,000 won ($119) apiece. This pricing scheme values the share sale at 2.45 trillion won (US$2.15 billion). Industry watchers expect that the listing of Samsung BioLogics will help keep the investment frenzy in the bio industry at the moment when Hanmi Pharmaceutical’s delayed disclosure is lowering the credibility in the bio industry, which has led to even “bio bubble.”
Samsung has come up with an early bio business strategy based on biosimilar and consignment production for the moment. Considering Samsung’s potential, however, it is a matter of time that it will advance the domestic industry by developing innovative and novel drugs in the long term. Chung Se-young, former chairman at the Pharmaceutical Society of Korea, said, “As Samsung have already injected trillions of won, it is the rising star to lead the bio industry. The company will definitely differentiate itself from other conglomerates which have made the inconsistent investment movements in the bio industry.”
However, some companies, mainly venture capital firms, complain that Samsung is making an output-centered manufacturing approach and pursuing an excessively stable strategy as it did in the semiconductor business before. A CEO from the first-generation bio venture firm said, “If Samsung really has a will, it should focus on developing new drugs, rather than biosimilars, based on the investment in U.S. bio ventures. The corporate value of Samsung BioLogics is also overestimated with expectations alone.”