Samsung Biologics likely to seek IPO approval this week

SEOUL: Samsung Biologics Co Ltd is expected to apply for stock exchange approval this week for its IPO, two officials with the Seoul bourse said, as part of its bid to become the world´s largest biopharmaceutical contract manufacturer by capacity.

The application is expected to be filed on August 11, the officials said. The initial public offering is expected by analysts to raise roughly 2-3 trillion won ($1.8 billion-$2.7 billion), which would make it South Korea´s largest listing this year.

The Korea Exchange officials declined to be identified as they were not authorised to speak to media. A Samsung Biologics spokesman declined to comment.

Samsung Biologics, whose customers include Roche and Bristol-Myers Squibb, has said it plans to use the IPO funds in part to double its bioreactor capacity to 360,000 liters by 2018, which would make it the industry´s largest contract manufacturer.

However, some investors questioned the offer´s timing. Samsung Biologics has yet to make a profit since its 2011 founding as investment continues. In 2015, it generated revenue of 91.3 billion won and an operating loss of 203.6 billion won, according to a company filing.

"Performance needs to be seen with our own eyes before we can judge," Lee Jin-woo, a fund manager at KTB Asset Management who invests in Samsung-related stocks. "Why are they rushing this?"

Samsung Biologics trails Switzerland´s Lonza and Germany´s Boehringer Ingelheim Group in terms of capacity. The company, along with biosimilar drugs maker Samsung Bioepis Co Ltd, is part of the Samsung Group´s bet on biological drugs as a new growth engine.

The Samsung Group is South Korea´s largest conglomerate but growth in key industries such as smartphones, where its Samsung Electronics Co Ltd is the world´s largest player, is slowing.