South Korea’s leading biopharmaceutical company Celltrion Inc. has set up a joint venture in China to directly produce and sell biosimilars in the world’s second-largest drug market.

Celltrion said Friday its Hong Kong unit teamed up with Hong Kong-based Nan Fung Group to launch Vcell Healthcare in Shanghai, China.

The new entity owns the rights to develop, manufacture and market Celltrion’s three major biosimilars - Remsima, Truxima and Herzuma – in China, the Korean company said.

Biosimilars are near-replicas of complex cell-based biologic drugs that offer similar pharmaceutical effects at more affordable prices.

Celltrion and Nan Fung Group are reviewing plans to build large-scale production facilities in China early next year.

Nan Fung Group is a multinational conglomerate founded in Hong Kong in 1954. One of the leading property developers in the city, it has broadened its portfolio to include an array of businesses ranging from property finance, life science, to hotel and shipping. In 2017, it set up Nan Fun Life Sciences, a global investment platform to foster partnerships among scientists, entrepreneurs, corporations and investors in the life science sector.

China’s pharmaceutical market is the second-largest in the world after the United States, showing an average annual growth rate of 13 percent over the past five years, according to the Korea Biotechnology Industry Organization. The market is projected to be worth 304.6 trillion won ($260 billion) in 2020 compared with 207.5 trillion won in 2015. China’s biopharma market in particular is expected to grow an annual 18 percent to reach 56.7 trillion won by 2020.

By Kim Byung-ho and Kim Hyo-jin

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