Korean biopharmaceutical company Celltrion has been selected as the preferred bidder for a large-scale biologics manufacturing facility in the United States, marking a strategic response to potential US tariff policies that could significantly impact pharmaceutical imports. The company announced Tuesday that it expects to finalize the acquisition agreement in early October, though details about the seller and specific location remain confidential.
Strategic Response to Tariff Uncertainty
Celltrion Group Chairman and founder Seo Jung-jin emphasized the critical importance of the US market during a livestreamed press conference, stating, "The US is simply too big a market to walk away from, and we're aiming to eliminate uncertainty in our US sales." The move comes as the US conducts national security investigations into the pharmaceutical sector, with President Donald Trump indicating that pharmaceutical tariffs could reach as high as 200 percent.
"If the US government wants drugs to be made in the US, then our plan is to produce them there accordingly," Seo explained, highlighting the company's adaptive approach to changing regulatory landscapes.
Investment and Operational Strategy
The acquisition represents a substantial financial commitment, with Celltrion planning to invest approximately 700 billion won ($503 million) in acquiring and operating the facility. The company has indicated that additional investments ranging from 300 billion won to 700 billion won may be necessary depending on how US tariff policies develop.
The facility, described as a cGMP (current Good Manufacturing Practice) drug substance site located within a major pharmaceutical hub, comes with a strategic advantage. The deal includes a contract manufacturing agreement covering 50 percent of the facility's capacity, granting Celltrion exclusive rights to produce the seller's biologics for five years.
"That means we won't be operating at a loss from day one," Seo noted. "The other half will be used to manufacture our own products for the US market."
Portfolio Expansion and Market Position
Celltrion currently markets 11 biosimilars in the US market and has ambitious expansion plans. The company aims to grow its US portfolio to 22 biosimilars by 2030 and 41 by 2033. Additionally, Celltrion is conducting Phase 1 trials for four novel drug candidates this year, with plans to submit investigational new drug applications for a total of 13 candidates by 2028.
The acquisition will be supported by two years' worth of US-bound inventory and expanded contracts with local contract manufacturers, providing operational flexibility during the transition period.
Competitive Advantages and Market Outlook
Seo highlighted the strategic timing of the acquisition, noting that competition would likely remain limited due to high capital requirements and long lead times for establishing local production capabilities. "We believe US drug prices are likely to rise, and for companies that complete local production early, this could be a major opportunity," he observed.
The potential facility expansion could reach up to 1.5 times the size of Celltrion's second plant in Songdo, Incheon, demonstrating the scale of the company's US market commitment.
Financial Performance and Projections
The strategic move comes as Celltrion demonstrates strong financial performance. In the second quarter, the company posted record revenue and operating profit, with revenue rising 9.9 percent year-over-year to 961.5 billion won and operating profit jumping 234.5 percent to 242.5 billion won.
For the full year, Seo indicated that Celltrion is on track to deliver 4.5 to 4.6 trillion won in sales toward its five trillion won annual goal, with operating profit expected to reach approximately 1.5 trillion won.
The acquisition also brings additional value through the inclusion of a development personnel team, which Seo noted would complement Celltrion's existing research capabilities and strengthen the company's overall development infrastructure.
