Samsung Biologics loads W3tr war chest to accelerate peptide M&A, production push

Samsung Biologics has made a bold move to cement its place among the world's top contract development and manufacturing organizations, launching a 3 trillion won ($2.17 billion) rights offering to fund the acquisition of a Swiss peptide CDMO and a major expansion of its Incheon campus. The company structured the deal to minimize dilution for existing shareholders, aiming to secure new growth engines while protecting shareholder value.

The board approved the offering Friday, disclosing a shareholder-priority rights issue with a general public offering for any unsubscribed shares. The offering ratio stands at 4.904 percent, with 2.27 million new shares to be issued at a planned price of 1.32 million won per share — a 15 percent discount to the reference price.

Of the proceeds, 2.71 trillion won will go toward acquiring PolypPeptide Group, a Swiss global peptide CDMO specialist whose acquisition Samsung Biologics decided to pursue in July. The remaining 294.8 billion won will be used as facility funds to expand the second bio campus in Songdo, Incheon.

The primary driver behind the large-scale offering is Samsung Biologics' push to stake an early claim in the peptide market, which has emerged as a key ingredient source for obesity and diabetes treatments. The global peptide drug market is projected to grow from $94 billion in 2025 to $200 billion by 2031, at a compound annual growth rate of 13.4 percent.

Samsung Biologics plans to complete the PolypPeptide Group acquisition — which brings six production sites across five countries including the United States, Europe and India — by the end of this year. The deal would round out a multi-modality CDMO portfolio spanning antibody drugs, messenger RNA, antibody-drug conjugates and peptides.

Expanding production capacity is the other pillar of the offering. The Songdo second bio campus, which will receive 294.8 billion won in facility funds, is being built to add 720,000 liters of capacity across Plants 5 through 8. Combined with the existing 785,000 liters, completion of the second campus would bring total capacity to 1.385 million liters, reinforcing Samsung Biologics' standing as the world's largest CDMO.

Market observers have praised the structure of the offering as both financially sound and shareholder-friendly. Under the shareholder-priority rights issue, 80 percent of new share subscription rights — excluding the 20 percent allocated to the employee stock ownership association under capital markets law — will be distributed to all existing shareholders on the basis of one new share for every 26 held. Shareholders who choose not to subscribe may sell their rights on the open market, while any unsubscribed shares will be fully underwritten by the joint lead managers after a public offering, eliminating the risk of a failed fundraise.

The offering ratio of roughly 5 percent is well below the 18.9 percent average for shareholder-priority rights issues of 1 trillion won or more by domestic listed companies over the past five years, and even lower than the 7.6 percent ratio Samsung Biologics recorded in its 2022 rights offering — which had been the lowest on record. Analysts say the structure strikes a careful balance between raising capital for future growth and protecting shareholder value.

"We launched this rights offering to lay the groundwork for our leap to become a global top-tier CDMO," Samsung Biologics Chief Executive John Rim said. "We will do our utmost to drive the three-pillar expansion — including the PolypPeptide Group acquisition and the second bio campus scale-up — without wavering, so that it translates into enhanced corporate value."