Aribio, which is developing AR1001, an oral Alzheimer's disease treatment, has signed a global licensing deal worth up to 7 trillion won with China's Fosun Pharma, drawing market attention to Samjin Pharmaceutical.
That is because Samjin Pharmaceutical is a strategic partner that holds the domestic manufacturing and sales rights for AR1001 and equity in Aribio. Samjin Pharmaceutical is currently the second-largest shareholder with about 5.9% equity in Aribio. Aribio also holds 8.34% equity in Samjin Pharmaceutical, making the two companies strategic allies.
On the 18th, at Aribio's AR1001 technology export (global licensing deal) press briefing held at Fairmont Ambassador Seoul in Yeongdeungpo-gu, Seoul, Chief Executive and President Choi Ji-hyun, a second-generation owner overseeing Samjin Pharmaceutical's sales and marketing and research and development (R&D) institutional sectors, attended.
Choi said, "From the spring five years ago when the phase 2 trial of AR1001 was wrapping up until now, the journey with Aribio has been an exhilarating time."
This also offers a glimpse into changes in Samjin Pharmaceutical's management.
In 2022, when Samjin Pharmaceutical executed a mutual equity investment of about 30 billion won with Aribio and signed a "pharma-bio technology management alliance agreement," the person who joined hands with Aribio CEO Jeong Jae-joon was then Samjin Pharmaceutical CEO Choi Yong-joo, a professional manager. Former CEO Choi, appointed in March 2019, led the company as sole representative before stepping down last year.
At the same time, Samjin Pharmaceutical's second-generation management system took off. Samjin Pharmaceutical has maintained a joint management structure of "one roof, two families" led by the founding families of Cho Eui-hwan and Choi Seung-ju for more than 50 years, and last year Chairman Cho's eldest son, President Cho Gyu-seok (overseeing management, finance and production), and Chairman Choi's eldest daughter, President Choi Ji-hyun, were appointed as co-representatives.
Through the agreement with Aribio, Samjin Pharmaceutical secured joint conduct of the domestic phase 3 trial of AR1001 and exclusive domestic manufacturing and sales rights. Although at the time of the initial investment some saw it as an unusual bioventure investment by a mid-sized pharmaceutical company, assessments now say it ultimately served as a foundation to preempt future business rights structures.
In particular, with this 7 trillion won global deal as a catalyst, attention is turning to the possibility that Samjin Pharmaceutical could go beyond securing domestic manufacturing rights to take on a pillar of the future global supply chain.
Aribio Co-CEO Jeong Jae-joon said, "In discussions with Fosun Pharma, we also talked about ways to slightly broaden the manufacturing rights held by Samjin Pharmaceutical," adding, "We are in talks to enable Samjin Pharmaceutical to secure status as a global second supplier or as a global supplier of active pharmaceutical ingredients (API) beyond the domestic market." This hinted that, if AR1001 is successfully commercialized, Samjin Pharmaceutical could take charge of part of the global manufacturing and supply system.
On the day, Aribio Co-CEO Sung Su-hyun also revealed the backstory of the deal. Sung said, "Fosun Group wanted to invest heavily in Aribio, but we blocked it because our family company, Samjin Pharmaceutical, did not want that."
Sung said, "We decided to accept Fosun's investment only up to a level after Samjin Pharmaceutical (the second-largest shareholder) because we did not think it desirable for a Chinese group to become Aribio's second-largest shareholder." This is interpreted to mean that, despite an investment proposal from massive foreign capital, the company prioritized its existing partnership (companion relationship) and governance stability.
Since news of Aribio's technology export broke on the 14th, Samjin Pharmaceutical's share price has soared to a 52-week high. After closing at 17,900 won on the 13th, Samjin Pharmaceutical shares reached 24,900 won on the 19th, rising about 39% over five trading days.
Analysts say securities investors are focusing on the manufacturing and sales benefits Samjin Pharmaceutical would enjoy and the potential rise in equity value if AR1001's clinical trial succeeds.
For President Choi Ji-hyun, this could be an opportunity to further cement Samjin Pharmaceutical's second-generation management system. Moreover, the domestic pharmaceutical industry as a whole faces the task of defending profitability and securing future growth engines ahead of the government's overhaul of the drug pricing system.
Samjin Pharmaceutical, long seen as a traditional drugmaker best known for the painkiller "Geborin," is also seeking to shift away from a generics-centered business structure by strengthening research and development (R&D). Last month, it was selected for the Ministry of Trade, Industry and Energy's "World Class Plus Project Support Program" to foster mid-sized corporations. Through this, it will receive a total of 4 billion won in R&D support over four years.
An industry official said, "With a sweeping price cut for generics (copycat drugs) expected in the second half, we are paying attention to the fact that Samjin Pharmaceutical is pursuing a structural shift at a time when mid-sized drugmakers are increasingly grappling with growth strategies."
Depending on the topline results of the AR1001 global phase 3 trial, expected to be announced in September to October, the fortunes of Aribio, largest shareholder Solux, second-largest shareholder Samjin Pharmaceutical, and global partner Fosun Pharma will be decided.
At the briefing, President Choi Ji-hyun said, "With the number of Alzheimer's patients increasing rapidly, as the company responsible for manufacturing and selling AR1001, we will do our best in supply and manufacturing preparations so that patients can have stable access to treatment."
Meanwhile, on the possibility of a direct listing, Aribio said, "There is no change in the policy of pursuing a merger with Solux." The company said, "Nothing has been decided regarding any change in the merger structure, and related procedures are proceeding according to the existing plan."