Celltrion Pharm Inc.

South Korean biopharma contract manufacturer Celltrion is considering acquiring US manufacturing sites to mitigate President Donald Trump’s potential tariffs on foreign-made pharmaceuticals. Trump is considering a variety of global tariffs to reduce US reliance on foreign manufacturing, including a 25% tariff on Canada and Mexico and 10% on China, which could affect non-US pharmaceutical companies and manufacturers. Incheon-headquartered Celltrion already has short- and long-term strategies in place in case the drug tariffs get implemented, the company said in a statement to shareholders on Thursday. Celltrion has six FDA-approved biosimilar products available in the US, as well as its subcutaneous infliximab injection Zymfentra, which is used to treat inflammatory bowel disease. It has three plants in South Korea, which are all certified by the FDA. The company also has a contract manufacturing arm , dubbed Celltrion Pharm, with a small molecule site in Cheongju, which ships products to the US, and an oral solid dosage factory located in Jincheon for domestic supply. Now, Celltrion is looking to buy facilities in the US to manufacture drug substances and drug products as a means to avoid Trump’s tariffs. Further, the company said it is also looking into collaborating with local manufacturers. As well as growing its US footprint, Celltrion is considering exporting drug substances, which will have lower tariffs, instead of finished products into the US. In the meantime, Celltrion said it has enough finished drug product inventory to supply the US until the third quarter of 2025. And, it has a good supply of active pharmaceutical ingredients already imported into the US to make finished drug products. However, the company also noted the drug tariffs are still “uncertain,” and it is “unclear” if they’ll be implemented. The tariffs could lead to rising drug prices in the US, which would contradict Trump’s previous ambition to cut drug prices during his first term, the company added. Further, tariffs might not be all bad for foreign competitors, Celltrion said. If implemented, tariffs are likely to increase inflation in the US, which can lead to high exchange rates for foreign companies and make their prices more competitive compared to US-manufactured drugs. Regardless, Celltrion said it is prepared to “respond immediately” if the tariffs are implemented.

South Korea's Celltrion will spend $94.5 million to build a new manufacturing facility at its Songdu campus near Seoul, according to reports. Celltrion, a South Korea-based biopharma manufacturer, plans to spend 126 million South Korean won ($94.5 million) to build a new production facility, according to local reports. The plant is expected to be completed and operational by 2027 and will be located at the company’s Songdo campus near Seoul, according to the Korea Biomedical Review. The company revealed its expansion plan at the Songdo campus Tuesday, the report said. When completed, the new facility will have an annual production capacity of 8 million vials and will be designed to operate at a high efficiency to reduce operating costs. Celltrion recently announced it would consolidate the Celltrion Healthcare and Celltrion Pharm divisions under the Celltrion umbrella as part of a three-way merger. Before that, back in 2020, Celltrion said it would spend $453 million to construct its third production facility at the Songdo campus. At the time, the company estimated the project would create up to 3,000 new jobs. That same year, Celltrion Chairman Seo Jung-jin announced the company would spend $33.6 billion over a 10-year period to boost its pharma business by investing in biologics operations and ingredient businesses plus artificial intelligence to create an e-commerce market for its drugs. In the latest presentation, Celltrion said the new plant is aimed at addressing growing demand, according to the Korea Biomedical Review.

Celltrion founder and chairman Seo Jung-jin announces his plan of merging Celltrion and Celltrion Healthcare during an online press conference on Thursday. [SCREEN CAPTURE] Celltrion will merge with Celltrion Healthcare, scrapping its original plan of a three-way merger to secure funds for large-scale investment and regain its shareholders' trust. Celltrion Pharm was excluded from the merger list for now but will be merged with the resulting company within six months at the earliest, according to Celltrion founder and chairman Seo Jung-jin. "The merger will combine the two companies' assets for future large-size investment, as well as simplify the transaction structure to raise transparency and regain trust from shareholders," Seo said during an online press conference Thursday. "A big merger and acquisition will be declared within the year." Celltrion Healthcare is a marketing company that handles the overseas distribution of products developed by Celltrion, a biosimilar company that is currently Korea's 14th largest company by market capitalization. Celltrion Pharm handles the domestic sales for the products developed by Celltrion. Each share in Celltrion Healthcare Energy will be swapped for 0.4492620 shares in Celltrion, which will be the surviving entity. The largest shareholder of the resulting company will be Celltrion Holdings, with a 21.5 percent share. Seo has a 98.1 percent share in Celltrion Holdings. Celltrion will hold a shareholder meeting on Oct. 23 for the merger, which will be finalized by Dec. 28. No restructuring will take place, Seo confirmed, meaning there will be no layoffs. The merger comes around three and half years after Seo first announced his plans in January 2020. He retired in March 2021, 19 years after founding Celltrion, but returned to management in March. Due to the delay, Celltrion shares more than halved from their peak, with shares of Celltrion Pharm and Celltrion Healthcare plunging by around 70 percent. A full 67 percent of Celltrion shareholders are retail investors. "Celltrion will grow as a global big pharmaceutical company, expanding our portfolio from biosimilar to new drug development," Seo said. "We can say with certainty we will proceed with the three-way merger step by step to keep the promise we made with our shareholders." Celltrion aims to expand its yearly revenues to 12 trillion won ($8.9 billion) by 2030, with sales from new drugs accounting for 40 percent. It will also up its biosimilar pipeline by 22 by 2030. Biosimilars, according to the U.S. Food and Drug Administration (FDA), are biological products that are approved based on proof that they are highly similar to other FDA-approved products. The drugs have no clinically meaningful difference in terms of safety or effectiveness from the reference product but cost less. Celltrion shares closed 143,600 won on Thursday, down 1.44 percent compared to the previous trading day. Celltrion Healthcare slid 1.08 percent to 64,300 won.