Following the Bio Big Deal, Seeking Breakthroughs Through M&A Amid Patent Expirations and Endemic Transition

Amgen Acquires Horizon for 36 Trillion KRW
Largest Pharma and Bio Deal This Year

India's Biocon Holds 4 FDA-Approved Biosimilars Through M&A
Big Pharma Like Pfizer, AZ, Lilly Actively Pursuing M&A

Domestic Firms SD Biosensor, Meridian Acquire for 2 Trillion KRW
LG Chem, Dong-A ST Also Engaging in M&A

Amgen headquarters located in California, USA
Photo by Reuters Yonhap News

[Asia Economy Reporter Chunhee Lee] This year has seen the largest big deal in the global pharmaceutical and biotech industry, amounting to 36 trillion won. Following the COVID-19 pandemic, major companies that secured substantial funding are now seeking new growth engines through mergers and acquisitions (M&A) amid the transition to endemic infectious diseases and the expiration of patents on key drugs.

On the 12th (local time), Amgen announced the acquisition of Horizon Therapeutics. The total contract value is $27.8 billion (approximately 36 trillion won), marking the largest M&A deal since AstraZeneca's $39 billion acquisition of Alexion last year. Horizon is an Irish biotech company that has developed treatments for rare autoimmune and severe inflammatory diseases. Robert Bradway, CEO of Amgen, emphasized, "The acquisition of Horizon aligns with Amgen's strategy to provide innovative medicines and achieve long-term growth."

The acquisition appears to primarily target Horizon's new drugs such as 'Tepeza.' Tepeza, a treatment for thyroid eye disease, more than doubled its sales last year compared to the previous year, boosting Horizon's total sales by 47% to $3.2 billion, making it a key product. Meanwhile, Amgen is expected to face sales declines as patents for osteoporosis treatments 'Prolia' and 'Xgeva' are anticipated to expire before 2030, prompting the company to pursue M&A for new growth drivers. Amgen explained, "By adding Horizon's portfolio of medicines for rare diseases, we can strengthen Amgen's portfolio."

However, to finance the acquisition, Amgen has taken on significant debt risk by signing loan agreements exceeding the acquisition amount, totaling $28.5 billion (approximately 37 trillion won) with Bank of America, Citibank, and others. Reflecting this situation, while Horizon's stock price surged 15.5% from the previous closing price to $112.4, close to the acquisition price of $116.5 per share, Amgen closed the day down 0.7% at $276.78.

The first interchangeable biosimilar approved by the FDA, 'Semglee' (Photo by Viatris)

Recently, numerous large and small M&A deals have been ongoing overseas to secure new growth engines. The advantage of M&A is that pipelines that were previously unavailable can be acquired all at once. Indian company Biocon Biologics acquired Viatris's biosimilar division last month for $3.3 billion (approximately 4 trillion won). Through this, they now own four FDA-approved biosimilars, including 'Semglee,' the first interchangeable biosimilar approved by the U.S. Food and Drug Administration (FDA) last year, as well as 'Ogivri,' 'Fulphila,' and 'Hulio.' According to the Korea Bio Association, as of last month, there are a total of 39 FDA-approved biosimilars, with Pfizer holding 7, Samsung Bioepis and Amgen each holding 5, competing for first to third place. With Biocon securing 4, it has emerged as a major player in the biosimilar industry alongside Celltrion and Sandoz, which also hold 4 biosimilars each.

Additionally, Pfizer has acquired Biohaven ($11.6 billion) and Global Blood Therapeutics ($5.4 billion), while Eli Lilly acquired Aquos ($600 million), AbbVie acquired Antibodies ($255 million), and AstraZeneca acquired LogicBio Therapeutics ($68 million), among other various M&A deals. An industry insider noted, "Although the total M&A transaction volume is smaller than last year, big pharma companies still maintain substantial cash reserves, so big deals to secure pipelines are expected to continue through the end of this year or early next year."

SD Biosensor CI (Photo by SD Biosensor)

This trend is also continuing domestically. Companies are actively utilizing funds secured during the COVID-19 pandemic for M&A, and with biotech stocks having sharply declined, they are aggressively pursuing deals. SD Biosensor announced yesterday that it has set the closing date for its $1.53199 billion (approximately 2 trillion won) M&A contract for Meridian Bioscience to the 31st of next month. Although the original closing date was the 6th of next month and the delay raised concerns about difficulties in raising acquisition funds due to the strong dollar, it is now analyzed that the acquisition process is entering its final stages.

By acquiring Meridian, which has various diagnostic technologies including gastrointestinal infection and immune diagnostics in addition to its core COVID-19 diagnostics, SD Biosensor plans to diversify its product lineup and establish a direct sales network in the U.S. Furthermore, SD Biosensor has expanded into various overseas regions by acquiring Germany's Bestbion in March and Italy's Rilab in April. At a briefing related to the Meridian acquisition in July, SD Biosensor Chairman Youngsik Cho also stated, "We plan to acquire one or two more distributors in the future."

LG Chem signed a contract worth $566 million (approximately 740.3 billion won) in October to acquire 100% of Aveo Pharmaceuticals' shares. Aveo holds 'Fotivda,' a kidney cancer treatment approved by the U.S. Food and Drug Administration (FDA) in March last year. Through this acquisition, LG Chem will own an FDA-approved new drug at once. Fotivda's sales are expected to reach 150 billion won this year and 500 billion won by 2027, indicating continuous growth. Aveo also has three oncology drug pipelines in clinical development, including the phase 3 trial of 'Piclatuzumab' for head and neck cancer. Notably, since Aveo has been directly selling Fotivda in the U.S. without partners, it is expected that direct sales of Aveo's future new drugs as well as LG Chem's new oncology drugs will enhance profitability.

Dong-A ST also acquired NeuroBo Pharmaceuticals, a Nasdaq-listed company, last month. By combining additional investment with the payment for the technology export of Dong-A ST's new drug candidate, they secured 65.5% of NeuroBo's shares for $37 million (approximately 48.2 billion won). As a Nasdaq-listed company, NeuroBo can secure its own funds, and by developing the pipelines sold by Dong-A ST, it plans to create synergy in subsequent development work.

This content was produced with the assistance of AI translation services.