Biogen and Samsung BioLogics first entered a partnership to create Samsung Bioepis in 2012, though Biogen only had 5.4% ownership of the company on creation.
Despite its short lifespan, Samsung Bioepis has quickly taken a strong position in the biosimilars market. It currently has two biosimilars approved in Europe, in Flixabi (a biosimilar to Remicade) and Benepali (a biosimilar to Enbrel).
On the creation of the company, there had been an agreement in place whereby Biogen could consolidate its position in the newly-created company but it had to exercise its option by a specified deadline.
When contacted, a Biogen spokesperson said that “the option was scheduled to expire mid-2018, so we exercised by the expiration date.”
Explaining why this option was taken, the spokesperson referred to the first quarter earnings call in April of this year where Biogen’s chief financial officer, Jeffrey Capello, stated that it planned to increase its stake in the company and that it represented “an attractive value creation opportunity”.
A short- or long-term stake?
When stated in such terms, the longevity of the deal could be called into question and comments from the spokesperson for the company did nothing to dispel such a take on the deal, stating: “While Biogen has not provided guidance for 2019 and beyond, based on the above statements, as well as other public statements we’ve made, one might assume we view the commercialisation of biosimilars as a potentially attractive opportunity. Biosimilars are not part of our strategic core, but are an important source of revenue.
“The biosimilars business is performing very well, and we are excited about its potential. We are commercially committed for the time being and will continue with a focus on growing this business.”
Stating that Biogen is committed in the ‘time being’ does not suggest that the company is taking a long-term view towards its position in the biosimilars market. As mentioned by the spokesperson, the products are not an integral part of the company’s portfolio, with its core focus being on neuroscience.
However, the decision to purchase additional shares could be complicated by the on-going accounting probe into Samsung BioLogics, though Biogen announced in its announcement of the share purchase that it expects the deal to close in the second half of 2018.