Samsung Biologics is accelerating its international growth strategy by entering the peptide market, a rapidly expanding sector driven by demand for new therapies against obesity and diabetes. The South Korean company has reached an agreement to acquire the Swiss PolyPeptide Group, thereby strengthening its production capacity and expanding its role in the global biopharmaceutical sector.
THE OFFER
Samsung Biologics has made a fully cash tender offer of 1.46 billion Swiss francs (approximately $1.8 billion) to acquire PolyPeptide Group, a Swiss company specialized in the development and production of peptide-based pharmaceutical active ingredients. The offer, notes Reuters, provides a consideration of 44.31 Swiss francs per share, representing a 6.1% premium over PolyPeptide’s closing price on Friday and about 40% more than the stock’s value before rumors of a possible acquisition.
The transaction is expected to close by the end of the year, subject to regulatory approvals and customary closing conditions. PolyPeptide’s board of directors has unanimously recommended that shareholders accept the offer.
MARKET REACTION
The announcement of the deal had a mixed impact on the stocks of the two companies involved. In Seoul, Samsung Biologics shares fell by up to 3.3% following the announcement, closing the session down 3.65%. Conversely, PolyPeptide’s stock rose, gaining up to 5.6% in trading after the offer was announced.
EXPANSION IN PEPTIDE THERAPIES
With the acquisition, Samsung Biologics aims to diversify its portfolio, which has so far been mainly focused on antibody drugs and antibody-drug conjugates (ADCs). The deal, writes the Financial Times, will add production capacity in the peptide sector, a rapidly growing segment within biopharma driven by increasing demand for drugs for obesity and diabetes, including treatments based on GLP-1 technology.
Peptide therapies, explains CNBC, consist of short chains of amino acids and include drugs that mimic certain natural hormonal mechanisms to help reduce appetite and regulate blood sugar. Demand for these therapeutic solutions has increased with the spread of weight management drugs like Wegovy and other GLP-1 class medicines.
POLYPEPTIDE’S PRODUCTION NETWORK
PolyPeptide operates manufacturing facilities in Sweden, Belgium, France, the United States, and India, with activities covering the entire industrial pathway, from research and development to process development and commercial production. The acquisition will allow Samsung Biologics to integrate an already operational international network and expand its offering in the contract development and manufacturing market.
Headquartered in Baar, Switzerland, PolyPeptide was founded in 1996 through a spin-off from the global pharmaceutical company Ferring and has developed and produced over 1,000 therapeutic peptides during its activity. The company specializes in synthetic peptides related to metabolism, with particular focus on obesity and diabetes areas.
ANALYSTS’ COMMENT
According to Mi Hyun Kim, a Morgan Stanley analyst quoted by Bloomberg, the acquisition of PolyPeptide supports Samsung Biologics’ strategy to broaden its scope beyond traditional antibody-related activities, in a context of strong growth in demand for GLP-1 based therapies. “The peptide drug market is growing rapidly thanks to GLP-1 drugs,” the analyst wrote in a note, describing the deal as a positive element for the South Korean group.
SUPPORT FROM THE CONTROLLING SHAREHOLDER
The deal, writes Reuters, has received backing from Draupnir Holdings, the main individual shareholder of PolyPeptide, which holds about 55.6% of the company. The holding company announced it will tender all its shares in the offer. Previously, PolyPeptide had communicated that Draupnir was considering strategic options regarding its majority stake.
After completing the acquisition, Samsung Biologics intends to delist PolyPeptide from the SIX Swiss Exchange and turn it into a wholly owned subsidiary of the South Korean group, potentially through a squeeze-out of shares still held by minority shareholders.
