Mizuho: Samsung Bioepis Renegotiation 'A Positive' For Biogen

Samsung Group is reportedly in talks to buy at least 30 percent of Biogen Inc BIIB’s stake in Samsung Bioepis, which could drive upside to the seller’s stock.

The Rating

Mizuho Securities analyst Salim Syed maintained a Buy rating on Biogen with a $433 price target.

The Thesis

Samsung BioLogics and Biogen, which together established the biopharma company Samsung Bioepis as a joint venture in 2011, currently hold respective 94.6-percent and 5.4-percent stakes in the entity, but Biogen also owns a call option allowing it to increase ownership to 49.9 percent by the end of June.

If Biogen exercises its right, as it has previously said it would do, Business Korea estimates it could cost about $421.35 million.

At the same time, Samsung Group is said to be prepared to spend $2.81 billion to purchase a portion of Biogen’s stake.

“If the article's numbers are accurate [...] the renegotiation would be a positive for BIIB in our view,” Syed said in a Wednesday note.

Regardless of whether Biogen sells or buys, it’s seen to incrementally boost its value. Syed forecasts the sell-or-buy scenario could drive 4-8-percent upside to the stock.

Price Action

Despite the news first breaking Monday, Biogen’s stock trended higher Wednesday and was up about 1.5 percent at the time of publication. 

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