By Michael Fitzhugh
The $300 million biosimilars joint venture first announced by Samsung and Biogen Idec (NASDAQ:BIIB) in December 2011, has appointed its first chief executive, begun construction of a Korean facility to house its work, and has been named Samsung Bioepis.
Christopher Hansung Ko, previously senior vice president of Samsung (OTC:SSNLF) Strategic Business Development, will serve as the venture’s CEO. He’ll be charged with leading the venture’s research and development center, which will be located at Samsung Biologics’ site in Song-do Incheon, Korea. The companies expect to finish construction by the end of the year.
Sales of biosimilars are expected to reach between $1.9 billion and $2.6 billion by 2015, up from $378 million for the year to the first half of 2011, according to IMS Health. With a new abbreviated approval pathway for biologics in the United States, and increasing adoption of biosimilars globally, both partners have made ramping up their presence in the biosimilars market a priority.
In May 2010, Samsung chose the biopharmaceutical sector as one of five new strategic businesses that would lead the group’s future growth, committing to invest $2 billion (2.1 trillion won) in biopharmaceuticals by 2020.
In an interview with Reuters in May 2011, Biogen CEO George Scangos said that he believed a follow-on biologics business could gain more than a billion dollars a year in revenue.
“With Samsung and Biogen Idec working together, we believe we have a really good shot at being a very dominant player in the biosimilars arena,” Scangos said at the JPMorgan Healthcare Conference in January.
Samsung Biologics, established in April by Samsung Group and Quintiles Transnational, will contribute $255 million to own 85 percent of the joint venture while Biogen will contribute $45 million, for a 15 percent stake. The venture will be based in South Korea and will contract with both companies for technical development and manufacturing services. It will not pursue any biosimilars of Biogen’s proprietary products.
Initially, Samsung will provide any additional funding for the venture. But Biogen maintains an option to purchase additional stock in the entity in order to increase its ownership percentage up to 49.9 percent.