Sam-il PwC "Bio M&A, Essential Management Strategy for Sustainable Growth"

Joint Seminar with Korea Bio Association

On the 30th of last month, the seminar "Key Strategies for Successful M&A," co-hosted by Samil PwC and the Korea Bio Association, was held in Yongsan-gu, Seoul, where Lee Dosin, Head of the Unicorn Support Center at Samil PwC, is speaking.
[Photo by Samil PwC]

As the merger and acquisition (M&A) market in the bio and healthcare sectors is expected to gradually recover this year, there is a call to establish M&A strategies considering three directions: securing new growth engines, improving management efficiency, and digital innovation.

On the 2nd, Samil PwC announced, "On the 30th of last month, we held a seminar titled 'Key Strategies for Successful M&A' targeting bio and healthcare companies at our headquarters in Yongsan-gu, Seoul." This seminar was the first event since signing a business agreement with the Korea Bio Association to support M&A activation, with over 130 industry stakeholders attending.

In his opening remarks, Do-shin Lee, Head of the Unicorn Support Center (Partner) at Samil PwC, said, "Since the IPO market rapidly cooled down after the second half of 2022, domestic bio companies will actively utilize M&A as a new exit strategy and essential management strategy. However, there are many obstacles such as intellectual property review, understanding regulations and approvals, and company valuation, so expert assistance with experience and expertise is necessary."

The first speaker, Sang-gyu Lee, Director of the Deal Division, presented 'Trends and Strategies in Bio and Healthcare Industry M&A,' proposing three M&A strategies: ▲strengthening the research and development (R&D) pipeline ▲portfolio optimization through management efficiency ▲digital innovation. Lee predicted, "This year, big pharmaceutical companies (Big Pharma) will lead the M&A market as they seek new growth engines due to revenue declines caused by drug price cuts and patent expirations. On the other hand, small and medium-sized companies will see their corporate value decline due to clinical delays caused by worsening financing conditions, making them more attractive acquisition targets."

In the second session, Chang-beom Yoon, Partner of the Deal Division, gave a presentation on 'Characteristics and Approaches to Valuing Bio and Healthcare Companies,' discussing considerations for company valuation based on theory and real cases. He explained, "Because the procedural process of clinical trials is involved, estimating value is difficult, but the industrial analysis process is crucial enough to calculate expected sales using data such as population by age group, prevalence, and effective demand. If there are threats from various substitutes, pre-analyzing these risk factors is also a way to reduce risk."

The third session featured Byung-guk Jin, Partner of the Tax Division, who spoke on 'Tax Issues Related to M&A.' Specific tax issues that may arise during M&A and recent taxation issues for startups were addressed. Partner Jin advised, "The discounted cash flow (DCF) method, which converts future value to present value, is most commonly used in bio companies, but there can be significant gaps between tax law valuation and actual value, causing difficulties. Since valuation methods differ depending on the purpose, it is necessary to understand this part."

Seung-gyu Lee, Vice Chairman of the Korea Bio Association and co-host of the seminar, said in his closing remarks, "As the bio industry diversifies and matures, the importance of M&A is expected to grow. Starting with this seminar, we will actively support M&A as a key driver of innovation and growth for bio companies and strive to ensure it leads to industry growth."

After the seminar, one-on-one on-site consultations between some company representatives and Samil PwC experts were conducted. Companies attending the consultations were able to discuss M&A-related difficulties and seek practical advice.

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