Biogen saw its stock price surge Wednesday on reports that Korean manufacturing giant Samsung Group is in negotiations to buy the Cambridge-based drugmaker.
A report in the Korean Economic Daily said that publicly traded Biogen approached Samsung with an offer to sell its shares, and the two sides were discussing a price that would value the company at more than $42 billion. A senior official at a global investment bank told the newspaper that South Korea-based Samsung is “at the negotiating table with the sell side to acquire Biogen.”
A Biogen spokeswoman declined to comment on the report.
“We do not comment on market rumors or speculation,” Ashleigh Koss said.
Biogen’s stock price jumped after the news hit Wednesday afternoon, closing up nearly 10 percent at $258.29 per share.
Turmoil has been swirling inside Biogen since the controversial approval of its Alzheimer’s disease drug, called Aduhelm, in June. The drug faced a challenging rollout, with large insurers saying they would not cover it. Last month, Biogen’s top scientist, Al Sandrock, abruptly announced his retirement after 23 years at the company.
Last week, Biogen cut the drug’s price in half, to $28,200, and said it would take steps to reduce costs by $500 million. Details of the cost-saving measures are expected to be made public in the first quarter of 2021, the company said.
All the turmoil around Aduhelm had some analysts unsurprised that rumors of a takeover are swirling.
”I don’t think it’s totally shocking,” said Michael Yee, managing director at Jefferies. “The stock is currently underperforming, and that’s why ultimately it becomes a target.”
He said some people in the industry might see Samsung as an odd buyer since it isn’t traditionally a global biopharmaceutical player. But that could be what makes a company like Biogen an enticing purchase.
”The buyer may not have a lot of US or global exposure, and you would purchase [Biogen] to gain that exposure and access,” Yee said.
Yee said a deal with Samsung could be better for Biogen’s 9,100 global employees since there would be less fear of consolidation post-merger, he said.
”It would potentially be very intriguing if all of this is because Samsung wants to further invest in the businesses, grow [them], and perhaps add more resources,” he said.
The full scope of Samsung’s offer, what a deal might mean for Biogen’s Cambridge headquarters and workforce, or any potential timing were all unclear late Wednesday. But the two companies do have an ongoing relationship.
Samsung is better known for its consumer electronics products, such as smartphones, televisions, and refrigerators, but the diversified conglomerate has a footprint in medicines, and its Samsung Bioepsis unit has been working with Biogen in recent years on so-called biosimilars, or lower-cost versions of existing drugs.
The two companies formed a joint venture in 2019 that has developed a biosimilar version of the macular degeneration drug called Lucentis, which was approved for the US market in September. Under terms of that partnership, Biogen was due to pay as much as $310 million to Samsung, which owns a 50.1 percent share of the enterprise, according to Jefferies.
The final price of the deal will likely include payments that are based on whether Bigoen’s Aduhelm program pans out. Additional data are expected in fall 2022.
Yee said this kind of deal structure is common between biotech firms and would at least provide Biogen a “graceful exit” if its program doesn’t live up to expectations next year.