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| Samsung BioLogics CEO Kim Tae-han speaks during last year's J.P. Morgan Healthcare Conference in San Francisco, Jan. 10, 2019 (KST). Kim will attend this year's conference too to assuage investors' concern on risks stemming from the company's alleged accounting fraud. Courtesy of Samsung BioLogics |
By Nam Hyun-woo
Samsung BioLogics will attempt to convince investors of its capacity in drug contract development and manufacturing at the upcoming J.P. Morgan Healthcare Conference.
The company said it will deliver a presentation on its performance last year, the production capacity of its plant 3 ― the world's-largest ― and unveil a mid-term plan in contract development and manufacturing as a main track company during the conference at the Westin St. Francis Hotel in San Francisco, Thursday (KST).
The annual conference ― being held for the 38th time ― is one of the largest pharmaceutical and biopharmaceutical events in the world. Unlike other exhibition-type events, host J.P. Morgan invites presenting companies and speakers to deliver key information such as the status of their pipeline and earnings trajectory to investors, thus laying the groundwork for major licensing deals.
At the conference, Samsung BioLogics CEO Kim Tae-han will give the presentation, defying earlier anticipation that he could miss the prestigious conference this year, due to the ongoing investigation into the alleged accounting fraud.
Samsung BioLogics has been reeling from the allegation that it intentionally violated accounting rules to inflate its corporate value in 2015, a year ahead of its initial public offering. At that time, Samsung BioLogics changed the status of its joint venture, Samsung Bioepis, from a "subsidiary" to an "affiliate," and saw Bioepis' value jump to 4.5 trillion won ($3.9 billion).
The prosecution has been investigating this case under suspicion that the firm cooked the books to help Samsung Electronics Vice Chairman Lee Jae-yong gain further control of Samsung Electronics and the entire Samsung Group.
Since then, prosecutors have grilled a number of ranking Samsung officials, including BioLogics CEO Kim, and are expected to indict Samsung BioLogics over the accounting fraud allegation in the near future. Trials are expected to take place throughout this year.
Kim's scheduled appearance is interpreted as a bid to shrug off potential investor concerns over risks with the company.
"Through its recent deals with major pharmaceutical firms, Samsung BioLogics has proven its capacity and capability as a go-to contract development and manufacturing organization, but has been affected by non-business risks as it was involved in the Samsung Group's management succession issue," a ranking official at a domestic biopharmaceutical firm said.
"It seems the company is trying to capitalize on the J.P. Morgan conference as a good chance to turn investors' attention back to its business by elaborating on its portfolio."
Analysts also echoed a similar opinion that the accounting fraud issue remains as a risk for the company, but uncertainties will be cleared when rulings are handed down.
"The remaining risk for Samsung BioLogics is the unfinished legal battle over the accounting fraud," Yuanta Securities analyst Seo Mi-hwa said. "If this issue is settled quickly, the operation rate of the company's plant 3 and winning additional manufacturing orders will be normalized quickly."
More deals for 'K-bio'
Not only Samsung BioLogics, but also other Korean biopharmaceutical firms will display their wares at the conference, and try to recover their reputation tarnished after a series of negative incidents, such as the ingredient error of Kolon Life Science's Invossa, the early termination of a phase three trial of SillaJen's Pexa-Vec and the placebo mix-up of Helixmith's Engensis gene therapy.
Celltrion Chairman Seo Jung-jin will present the company's pipeline and future plans, as well as promoting the firm's prowess in the field of biosimilars, including the Remsima SC autoimmune treatment which won European approval in November.
Along with Samsung BioLogics, Daewoong Pharmaceutical, Genexine, Hanmi Pharmaceutical, Hugel and LG Chem will join the conference as presenting companies.
"A number of license-out deals and approvals from the U.S. Food and Drug Administration have led the growth of the domestic pharmaceutical industry arly last year, but it all stopped after a series of negative events followed," SK Securities analyst Lee Tal-mi said. "However, pharma and bio firms logged favorable earnings since the third quarter, and such an uptrend will pick up momentum after the J.P. Morgan Healthcare Conference as actual deals may follow."
