Key points:
- Biogen just announced that it was selling its 50% stake in its Samsung JV.
- The JV has been highly profitable, and Biogen will receive $2.3bn for its stake.
- The two firms will keep working together due to existing commercial agreements.
The Biogen Inc (NASDAQ: BIIB) share price barely moved despite the biotech company agreeing to sell its stake in the biosimilar joint venture with Samsung known as Samsung Bioepis for up to $2.3 billion.
Biogen is set to receive an initial sum of $1 billion once the deal closes and another payment worth $812.5 million on the first anniversary of the deal, with the last sum of $437.5 million being paid on the deal’s second anniversary.
Biogen could receive an extra $50 million in milestone payments once certain conditions are met, bringing the transaction's total value to $2.3 billion.
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The company is set to sell its 50% stake minus one share in the biosimilar joint venture with Samsung after acquiring the stake in June 2018. The joint venture was established in 2012, and Biogen had an initial 15% stake before acquiring the more significant stake in 2018.
Since its founding, the joint venture has been highly successful after launching five biosimilars worldwide, two in oncology and three in the autoimmune sector. In addition, the JV has four products in phase III clinical trials.
The companies will maintain their current commercial agreements regarding commercializing products in their current portfolio.
Furthermore, Biogen will maintain the commercial rights to Byooviz (ranibizumab-nuna), a biosimilar product that treats muscular degeneration. The drug received approval from the US FDA and was the first biosimilar product to get such approval. The drug is also marketed in the EU and UK.
Biogen is getting an excellent deal out of this arrangement, including the revenues generated from the commercialisation agreements yet its shares barely moved during premarket trading.
As a short term trader, I expect a significant move in Biogen shares at the open despite its lacklustre premarket performance. However, as savvy investors know, there are no guarantees in the markets, and we must always trade what we see in the markets.
*This is not investment advice. Always do your due diligence before making investment decisions.