Samsung Biologics Receives Approval for IPO in South Koreaby
Lisiting could help conglomerate expand in pharmaceuticals
Company manufactures complex biopharmaceuticals for industry
Samsung Biologics Co., the drug-manufacturing arm of the South Korean conglomerate, received approval to list its shares in South Korea, allowing it to move ahead with an initial public offering that would help it expand in a lucrative pharmaceutical market.
The listing of the business, which manufactures complex drugs called biologics for drug companies, offers the South Korean conglomerate a new area of growth to offset pressures in its smartphone operations. Samsung Electronics Co., the maker of Galaxy mobile phones, faces rising competition from new models of Apple Inc.’s iPhone. In recent weeks it began recalling millions of its Note 7 phones because of faulty batteries.
Samsung Biologics has sought to ramp up its presence in the growing market for biopharmaceutical medicines. Biologics are made up of organic, live substances such as hormones, antibodies and other proteins. They are more complex to research and manufacture than other drugs and can address previously treatable conditions with higher efficacy and fewer side effects. The global biologic medicines market is projected to exceed $390 billion by 2020, according to an IMS Consulting Group report funded by Novartis.
The South Korean stock exchange announced the approval for the share listing without specifying the potential size or timing of the IPO. Samsung Biologics couldn’t immediately be reached.
In December, Samsung Biologics began the construction of an 850 billion won ($741 million) plant, its third, saying it was aiming to become the world’s largest biologics contract manufacturing organization. Once the plant is in operation, Samsung Biologics expects it will reach 1 trillion won in operating profit.
Tae Han Kim, a former executive vice president of strategic business development at Samsung Group, was appointed the unit’s chief executive officer in April 2011. Since then, the company has announced manufacturing agreements with companies including Bristol-Myers Squibb Co. and a unit of Roche Holding AG.
Samsung C&T Corp. owns 51 percent of Samsung Biologics while Samsung Electronics Co. holds 46.8 percent.