Biogen, which owns nearly half of a Samsung unit, shares surged Wednesday. A South Korean newspaper reported that Samsung wants to buy Biogen for as much as $42 billion.
Adam Glanzman/Bloomberg
Biogen stock jumped on Wednesday after a South Korean newspaper reported that Samsung Group was in talks to acquire the drugmaker.
A Samsung spokesperson told Barron’s in an emailed statement that the report was groundless.
The Korea Economic Daily, citing unnamed investment banking sources, reported that Samsung is engaged in negotiations to acquire Biogen (ticker: BIIB). The deal could value Biogen at $42 billion, according to the report. That represents about a 20% premium from Biogen’s current market cap of about $35 billion
Biogen said it does not comment on market rumors and/or speculation.
Biogen stock rose 9.5% to close at $258.31 on Wednesday, bringing the year-to-date gain to 5.5%.
Biogen owns less than half of Samsung Bioepis, a unit that develops biosimilar drugs. As of September, five low-cost biosimilar drugs from Samsung Bioepis have been approved in the U.S.
“The alleged takeout valuation of $42B represents a relatively small acquisition premium and is well below our equity valuation of $52B ($53B EV – $7B debt + $6B cash),” Oppenheimer analyst Jay Olson told Barron’s. “A deal at $42B would seem to take unfortunate advantage of the currently distressed situation. We would prefer to see a takeout significantly above our $350 per share target price for Biogen.”
Earlier this year, the company’s Aduhelm drug, an Alzheimer’s disease therapy, was approved by the U.S. Food and Drug Administration, despite some concerns from doctors and researchers. The drug’s sales hit only $300,000 in the third quarter, well short of estimates at $12.1 million. The company said in December it would cut the price of the therapy by half to $27,200 a year for a patient of average weight.
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