Samsung Biologics makes $1.8 billion cash offer for PolyPeptide

Samsung Biologics said Monday it has offered 1.46 billion Swiss francs, or $1.8 billion, in cash to acquire Switzerland’s PolyPeptide Group, a specialist in peptide-based active pharmaceutical ingredients. The proposed deal would give the South Korean contract drugmaker a larger role in the supply chain behind GLP-1 medicines used for obesity and diabetes, one of the fastest-growing areas in biopharmaceuticals.

Under the public tender offer, PolyPeptide shareholders would receive 44.31 Swiss francs for each share, Samsung Biologics said. In a tender offer, a buyer seeks to purchase shares directly from investors at a specified price; in this case, the consideration is cash rather than Samsung Biologics stock.

Samsung Biologics said it expects the transaction to close by the end of this year. The company described the offer as the largest biopharmaceutical merger and acquisition transaction in South Korea’s history.

Push into peptide therapeutics

Samsung Biologics said the acquisition would broaden a business that has been centered on antibody drugs and antibody-drug conjugates. The company said it wants to serve more client demand across therapeutic technologies, with peptide-based GLP-1 treatments for obesity and diabetes driving growth in the field.

Peptide therapeutics are medicines built from short chains of amino acids. Some GLP-1 drugs fall into this category and work by mimicking a naturally occurring hormone involved in appetite and blood-sugar regulation.

PolyPeptide, based in Baar, Switzerland, develops and manufactures therapeutic peptides. Samsung Biologics said the Swiss company has worked on more than 1,000 therapeutic peptides since being spun out of global pharmaceutical company Ferring in 1996.

The deal would also add PolyPeptide’s international research, development and manufacturing network to Samsung Biologics. According to Samsung Biologics, that network spans Sweden, Belgium, France, the U.S. and India and includes commercial manufacturing capabilities.

Board support and market reaction

Peter Wilden, PolyPeptide’s chairman, said the company’s board had reviewed strategic options and viewed the Samsung Biologics proposal as attractive for shareholders.

“After a comprehensive review of strategic options, the Board is convinced that Samsung Biologics’ offer is compelling for our shareholders, delivering an attractive cash price and immediate, certain value today,” Wilden said.

Samsung Biologics shares were down 1.3% in early Monday trading. The company did not report additional market reaction in its announcement.

The offer comes as pharmaceutical companies and contract manufacturers seek capacity for peptide production amid rising demand for weight-loss and diabetes therapies. Samsung Biologics said PolyPeptide would help it diversify beyond its current offerings and address demand from clients working across a wider range of drug types.

This story draws on original reporting from CNBC.