Pharmaceutical Bio Industry's Global Winning Move is M&A

The Biggest Beneficiary in the COVID Era
Leading M&A of In Vitro Diagnostic Device Companies
Active Corporate Acquisitions to Secure New Pipelines
Expected to Continue Steadily Throughout This Year

[Asia Economy Reporter Lee Gwan-ju] Domestic pharmaceutical and bio companies have been actively engaging in mergers and acquisitions (M&A) in the first half of this year to "increase their scale." Some companies have announced plans for aggressive acquisitions to secure global competitiveness, indicating that the M&A trend in the pharmaceutical and bio industry is expected to continue for the time being.

M&A Led by the Diagnostic Device Industry

In vitro diagnostic device companies, beneficiaries of the COVID-19 pandemic, have been leading M&A activities this year. This is interpreted as a reflection of their determination to respond in the post-COVID era based on the financial resources they have secured so far. SD Biosensor acquired Italian in vitro diagnostic distributor Rilab for 61.9 billion KRW this month, following last month’s acquisition of German in vitro diagnostic distributor Bestbion. Both companies are distributors supplying various in vitro diagnostic devices and have distribution systems and know-how built over more than a decade. This acquisition is seen as providing SD Biosensor with a foothold to quickly enter the European market. Thanks to record-breaking performance, including last year’s sales of 2.9314 trillion KRW, there is a high possibility of additional M&A to secure growth momentum.

Mico BioMed has decided to acquire Trinity Biotech, a Nasdaq-listed in vitro diagnostic specialist company in the United States. Founded in 1992, Trinity Biotech currently holds over 120 FDA-approved diagnostic products. It has strengths in diagnosing diabetes, human immunodeficiency virus (HIV), and autoimmune diseases. Through this acquisition, Mico BioMed expects to expand its new product portfolio, diversify distribution channels, and enhance research and development (R&D) synergies. This acquisition was also conducted as part of preparations for the post-COVID era. A Mico BioMed official stated, "We will secure new growth engines for the post-COVID era through cooperation with a company that has a global sales network and competitive products approved by the FDA and the World Health Organization (WHO)."

M&A as a ‘Global Survival Strategy’

M&A activities aimed at securing new pipelines, improving technology, and acquiring distribution channels to strengthen global competitiveness are also ongoing. GC Cell recently acquired Bioscentric, a U.S.-based contract development and manufacturing organization (CDMO) specializing in cell and gene therapies. Through this, GC Cell has secured a CDMO base connecting Asia and the U.S. and plans to expand its North American facilities further. Earlier in February, Boryung Biopharma acquired the research division of Forbio Korea and established Bifigen to secure foundational technology and expand pipelines for messenger RNA (mRNA) vaccines and new drug development. Huons Group’s affiliate HuM&C acquired 100% of the shares of medical device specialist Huvena and is also pursuing a merger. HuM&C aims to become a specialized healthcare materials company.

Particularly, the industry is paying attention to Samsung BioLogics’ acquisition of Biogen’s stake in Samsung Bioepis. On the 20th, Samsung BioLogics completed the first payment of $1 billion for the stake acquisition and officially incorporated Samsung Bioepis as a wholly owned subsidiary. The industry views this as a decision to further strengthen global competitiveness. Although there may be no significant short-term changes from incorporating Bioepis as a subsidiary, it is expected that in the mid-to-long term, the company will be able to diversify its business portfolio, including new drug development.

M&A in the pharmaceutical and bio industry is expected to continue steadily this year. Along with SD Biosensor, which has already completed two acquisitions, many companies such as SK Bioscience and Osstem Implant have announced active M&A plans. An industry insider said, "While M&A is being conducted to secure new pipelines and technology, recent trends also focus on accelerating entry into the global market. The recognition that success requires global competitiveness is growing, so acquisition activities of overseas companies are expected to become more active in the future."