Celltrion stuns the market with merger and expansion plan for this year

2020.01.17 12:59:22 | 2020.01.17 14:28:01

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Major South Korean biosimilar manufacturer Celltrion Inc. is seeking to combine Celltrion Healthcare Co. and Celltrion Pharm Inc. under one roof to rebrand itself as a comprehensive drug multinational, upon agreement by shareholders in each company, according to chairman Seo Jung-jin.

During the annual J.P. Morgan Healthcare Conference in San Francisco on Wednesday (local time), Seo said that shareholders will be asked around next year about a merger of the trios, a plan that has been proposed to create synergy by integrating development, production and distribution. Currently, Celltrion is responsible for developing and producing biologic agents, Celltrion Pharma for synthetic drugs and Celltrion Healthcare for overseas distribution of these medicines.

In response to the chairman’s surprise merger talks, Celltrion said in a regulatory filing on Friday that the company has been reviewing a merger among the three entities but nothing has been determined.

The news was met with initial fanfare with gains from 2 to 19 percent in related stocks.

As of 12:04 p.m. on Friday, Celltrion shares were trading at 175,000 won, down 3.1 percent, or 5,500 won, from the previous session when they added 2.3 percent. Celltrion Pharm lost 0.9 percent, or 400 won, to 45,000 won after surging 19.3 percent a day ago, while Celltrion Healthcare inched up 0.2 percent, or 400 won, to 45,000 won, extending gains from the previous session when the stocks jumped 6 percent.

Celltrion Chairman Seo Jung-jin speaks at the annual J.P. Morgan Healthcare Conference in San Francisco on Wednesday (local time).[Photo provided by Celltrion] <br><br>이미지 확대

Celltrion Chairman Seo Jung-jin speaks at the annual J.P. Morgan Healthcare Conference in San Francisco on Wednesday (local time).[Photo provided by Celltrion]

Seo also said Celltrion will diversify its product portfolio beyond biosimilars, adding three vaccines to prevent pneumonia, influenza and shingles will be developed, and 25 modified synthetic drugs will be prepared with marketing approval from the U.S. FDA within this year. Celltrion will also develop a biosimilar version of Lantus, a best-selling diabetes drug. Production of the insulin biosimiar will begin in 2023 from the company’s first overseas plant whose construction is due in April in China.

Celltrion finally unveiled a plan for overseas manufacturing by establishing plant in China with an annual capacity of 120,000 liters in cooperation with a local Chinese government, Seo said.

The project will be carried out separately from a plan to add a 200,000-liter plant in Songdo, Incheon, its key manufacturing site in Korea. A portfolio of 16 products tailored for the Chinese market will be set up by 2030, Seo added. The ratio among future sales of biosimilars, biobetters, and first-in-class drugs will be 60:25:15, he explained.

The company will launch Remsima SC, the subcutaneous version of Remsima, around the world except the U.S. and Japan this year. After retirement later this year, Seo will devote to ubiquitous healthcare business that combines remote medical services and big data using artificial intelligence.

Meanwhile, Samsung BioLogics, another Korean biosimilar giant, said it will establish an R&D center in San Francisco around April for contract development organization (CDO) business. The company plans to win over 60 CDP projects this year to improve profitability, Samsung BioLogics CEO Kim Tae-han said during the conference.

By Kim Byung-ho and Minu Kim

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