Samsung Biologics is launching a 3 trillion KRW (about 2.17 billion USD) capital increase to propel itself into the ranks of global top-tier contract development and manufacturing organizations (CDMOs). The bulk of the funds will be used to acquire the global peptide CDMO, Polypeptide Group.

On Friday, Samsung Biologics announced that its board had approved a 3.9 trillion KRW (about 2.83 billion USD) capital increase, representing a 4.904% boost in equity.

The company plans to issue 2.27 million new common shares at 1,322,000 KRW (about 961 USD) per share, applying a 15% discount.

Of the raised funds, 2,706.2 billion KRW (about 1.96 billion USD) will go towards the recently finalized acquisition of Polypeptide Group. The remaining 294.8 billion KRW (about 214 million USD) will fund the expansion of its second bio campus in Songdo, Incheon.

In July, Samsung Biologics agreed to acquire Polypeptide Group for 1.46 billion CHF (about 1.81 billion USD), marking the largest merger and acquisition (M&A) deal in South Korea's pharmaceutical and biotech industry to date.

This acquisition will broaden Samsung Biologics' portfolio beyond antibody drugs, mRNA, and antibody-drug conjugates (ADCs) to include peptides. It will also expand the company's global manufacturing footprint with new facilities in Europe, the U.S., and India.

Peptides, chains of amino acids crucial for hormones and cellular signaling, are increasingly used in pharmaceuticals, particularly for treating obesity and diabetes.

Samsung Biologics is also investing in capacity expansion. The company plans to build its 6th, 7th, and 8th factories at its second Songdo bio campus, aiming to boost its global antibody drug production capacity to 1,385,000 liters.

The capital increase will be executed through a rights offering, followed by a public offering of any unsubscribed shares. Twenty percent of the new shares will be reserved for the employee stock ownership plan, with the remainder allocated to existing shareholders based on their current stakes. Current shareholders can subscribe from November 9-10, with the new shares expected to list on November 30.

John Lim, Chief Executive Officer (CEO) of Samsung Biologics, stated that this capital increase lays the foundation for the ascent to global top-tier CDMO status. It's committed to executing the three-pronged strategy: acquiring Polypeptide Group, expanding the second bio campus, and enhancing the corporate value through these initiatives.

Samsung Biologics is launching a 3 trillion KRW (about 2.17 billion USD) capital increase …

Samsung Biologics Launches 3 Billion USD Stock Offering to Acquire Polypeptide Group: What This Means for the Global CDMO Market