Seoul: Celltrion Inc., a leading South Korean biopharmaceutical company, announced that it has been selected as the preferred bidder to acquire a biopharmaceutical manufacturing facility in the United States. This strategic move is intended to mitigate potential impacts from the upcoming changes in the U.S. tariff scheme, which is set to impose reciprocal tariffs on major trade partners, including a 25 percent levy on South Korean imports starting Friday.
According to Yonhap News Agency, several countries are making last-minute efforts to negotiate lower tariff rates. Celltrion Chairman Seo Jung-jin explained during an online press conference that the company has opted to invest in an existing U.S. facility rather than constructing a new one due to these potential tariffs. The company plans to conduct due diligence on the facility before finalizing the acquisition, which it aims to complete within the year if the deal proceeds.
Celltrion has not disclosed the name of the U.S. company operating the plant or the exact value of the acquisition. The initial investment is projected at 700 billion won (approximately US$503 million), with potential further investments ranging from an additional 300 billion won for a small-scale expansion to 700 billion won for a large-scale expansion, depending on market demand.
In May, U.S. President Donald Trump signed an executive order to lower domestic drug prices by benchmarking them against international prices. This order targets intermediaries like pharmacy benefit managers and insurers, which are seen as contributors to high drug costs. Seo stated that while the executive order does not directly affect Celltrion, the looming tariffs present a significant concern, prompting this investment decision. Despite these challenges, the U.S. market remains a vital area for Celltrion's operations.
Celltrion has been expanding its global biosimilar portfolio, aiming to increase its approved products from six to 11, with plans to commercialize 22 biosimilars by 2030 and 41 by 2033. Additionally, the company intends to start clinical trials for 13 original drugs by 2035. Celltrion's original drug, Zymfentra, is available in the U.S. for treating autoimmune diseases.
Company projections suggest that the global market for its 22 planned biosimilars will nearly double from 138 trillion won this year to 261 trillion won by 2030. Although Celltrion initially targeted 5 trillion won in sales for this year, a 40 percent increase from last year's record of 3.56 trillion won, the chairman has revised this target to between 4.5 trillion and 4.6 trillion won due to costs related to the company's merger with Celltrion Healthcare.