Beacon Transcript – The Samsung Group BioLogics unit was officially released on the market this Tuesday after first being established in 2011, and closed its first day with a higher than estimated value.
Samsung BioLogics is the biopharmaceutical subdivision of the South Korean Samsung Group who is perhaps better known as a technology giant.
Samsung has stated that the company views health care and biotechnology to be amongst the five businesses that are most likely to rise and help company growth for the next decade just as the consumer electronics sector has slowed its growth.
Samsung has also declared that it will be looking to place biotech on the same level with the semiconductor manufacturing domain and as such, become one of their core businesses.
Biotechnology or biotech is the name given to the production process of biologic drugs. As opposed to medicine that relies on chemicals and other such synthesis products, biologic drugs are based on tissue and living cells.
Samsung BioLogics, the group’s biotech subdivision is already producing this type of drugs for a number of big pharmaceutical companies.
Another of the mother company’s units the Samsung Bioepis, which is a close affiliate to the BioLogics, targets the research and development of the cheaper version of biologic drugs, the biosimilars.
Samsung BioLogics will reportedly use a part of its stock offering proceedings in order to finance and complete the company’s third biotech factory, which is estimated to cost about $740 million.
Once it will be completed, the biotech factory which is set to start functioning in 2018, the BioLogics division will probably have the biggest annual capacity of supplying biological drugs.
As the biggest biological medicine global distributor, Samsung will probably surpass the current largest makers, the German Boehringer Ingelheim and Swiss Lonza.
Samsung BioLogcs had a strong market debut on Tuesday on the Seoul market as it opened at 135,000 won with an estimated IPO of 136,000 won (a South Korean won = 0.000868 US$).
The group exceeded expectations after closing at $125 per share or 144,000 won after slightly falling from its 148,000 won maximum level with the market capitalization coming to 9.52 trillion won.
The Samsung Group estimates place the annual biomedicine market growth as being at around 9 percent as opposed to the general drug market which is estimated to grow by about 4 percent.
As according to the Samsung regulatory filing, the global biomedicine drug is expected to reach a $314.8 billion value by 2020. The biotech drug industry marked a total market value of $204.8 billion during the last fiscal year.
With some analysts already questioning the Samsung BioLogics evaluated market listing of $8 billion, there are other who consider that it should actually be higher.
A Baro Investment & Securities equity analyst places the unit’s general value at about $9.1 billion or 10.5 trillion won after also taking into consideration the Bioepsis connected products and the BioLogic’s future manufacturing power.
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