Biogen's roller coaster 2021 takes another surprising turn with report of $42B Samsung buyout interest

Samsung Group is in talks to buy Biogen in a deal that could be worth $42 billion, the Korea Economic Daily reported Wednesday, citing investment banking sources.

If the report is true—and if negotiations succeed—Samsung would take control of Biogen at a time when the biotech is laboring to launch its controversial Alzheimer’s drug, Aduhelm, and suffering from declining revenues as generics eat away sales of its flagship multiple sclerosis drug, Tecfidera.

Reports of the potential buyout sent Biogen shares soaring Wednesday afternoon, from $235 per share up to $262.40 at press time. That’s still far below what the stock was worth back in June, just after Aduhelm’s approval, when it was trading above $400 per share.

When asked about the Samsung buyout talks, a Biogen spokesperson said the company does not comment on market rumors or speculation.

Samsung is no stranger to Biogen. The two companies have a biosimilars-focused joint venture, Samsung Bioepis. According to the Korea Economic Daily's report, it was Biogen that approached Samsung.

For Samsung, the deal would be a big step forward in the biopharma world. Already a fast-growing contract manufacturer and a biosimilars maker, Samsung would gain a foothold in new drug development. It'd also scoop up Biogen's marketed drug franchises that generated $13.44 billion last year, enough to make the biotech a top 20 pharmaceutical company worldwide. 

In an interview with Fierce Pharma last month, Samsung Biologics CEO John Rim said the company would be angling to grow beyond its home country’s borders to better serve global customers—with both M&A and new construction in the cards.

RELATED: Biogen, with sales falling sharply, posts 'obviously disappointing' Aduhelm sales of $300K, CEO Vounatsos says

Meanwhile, Cambridge, Massachusetts-based Biogen is gearing up for layoffs as part of a $500 million cost-cutting drive. It’s also slashing Aduhelm’s price in half as of January 1, 2022, in a bid to jump-start the sluggish rollout. Despite the FDA's backing in the form of an accelerated approval, the drug has seen limited use so far. It generated just $300,000 in third-quarter sales.

Biogen’s woes have served to drag shares back down to pre-Aduhelm approval levels, when investors and analysts worried about the company’s future sources of revenue. Aduhelm appeared to be a long shot for approval, analysts figured, and patent losses and competition were rapidly draining the air out of its key multiple sclerosis franchise.

As for their joint venture, Samsung Bioepis sells its own versions of top biologic drugs such as Johnson & Johnson’s Remicade. Its version of AbbVie’s megablockbuster Humira has been approved by the FDA and is cleared for launch in June 2023. The biosims business is generating about $800 million in annual revenues, and Samsung already owns 50.1% of the venture. 

The deal could feature complications, Jefferies analyst Michael Yee wrote to investors on Wednesday, as Biogen's business in Alzheimer's would make a potential buyout "very difficult to value." He suggested that contingent value rights—the same mechanism that Bristol Myers Squibb deployed in its Celgene buyout—may be used to account for various levels of potential success in the field.

Such a CVR could be tied to Aduhelm sales milestones or forthcoming phase 3 data on Alzheimer's hopeful BAN-2401, due in Fall 2022, Yee wrote.

RELATED: Despite rough start, Biogen's Aduhelm should find footing, analysts say. But don't expect much in 2021

Back in June, the South Korean company said it planned to plow $205 billion into its growth businesses—including biopharma—through 2023. It already has a so-called “Super Plant” on the way in Incheon, South Korea, which will be as large as its other three plants in the city, combined.

“It’s more when not if,” Rim told Fierce Pharma of Samsung Biologics’ expansion into the U.S. “We’re continuing to look at when is the opportune time to make an investment in the United States and make an investment in Europe as well.”