Samsung BioLogics posted Tuesday that the transfer of assets related to Samsung Bioepis call option contract with U.S. Biogen will end on Wednesday.
Samsung BioLogics plans to transfer 9,226,668 shares of Samsung Bioepis to Biogen, and Biogen will provide Samsung BioLogics with about 795.5 billion won ($677.2 million), which includes the share price and the interest on the acquired shares.
With the completion of the call option, Samsung BioLogics and Biogen will now jointly manage Samsung Bioepis.
Accordingly, the company will delete its assets to be sold (2.2 trillion won) and derivative liabilities (1.9 trillion won) reflected in its current financial statement. Also, in the fourth quarter of this year, the company will post non-operating income of about 414.3 billion, which it acquired from the disposal of its subsidiary.
The company’s cash and cash equivalents assets will increase from 477.9 billion won to 1.2 trillion won, while the debt ratio declined from 94.6 percent to 42.6 percent.
“Through the joint venture with Biogen, the biosimilar business was able to achieve such good results early on,” Samsung BioLogics CEO Kim Tae-han said. “We will strive to remain a successful joint venture with a global biotechnology company through close cooperation in the future as we have started a full-fledged joint management system by ending this asset transfer.”
The call option comes during a heated argument between the Financial Supervisory Service (FSS) and Samsung BioLogics regarding the latter’s alleged violation of accounting regulations.
The FSS had accused Samsung BioLogics of violating the relevant accounting standards when it changed Samsung Bioepis from its subsidiary to an affiliated company at the end of 2015.
Samsung BioLogics had turned Samsung Bioepis, in which the company owned a 91.2 percent stake by the end of 2015, into an affiliate firm ahead of the former’s initial public offering on Nov. 10, 2016.
Samsung BioLogics turned to profit after changing the company value of Samsung Bioepis from book value, also known as acquisition value, to market value, also known as fair value. The FSS had pointed out that this process did not follow proper accounting rule.