Expect to Completely Resolve Tariff Risk...Celltrion selects preferred bidder to acquire large-scale production facilities
Jul 29, 2025
|
On the 29th, Celltrion wrote a message to shareholders (from the company's position on the comprehensive response to U.S. tariffs) "We have been continuously monitoring the U.S. drug tariff policy and preparing a response strategy for each period to minimize its impact.", and shared the new update as the preferred bidder for the acquisition of biopharmaceutical production facilities in the United States was selected.
The plant that Celltrion is seeking to acquire in connection with the acquisition of production facilities in the U.S. is a large-scale raw material drug (DS) cGMP production facility owned by an undisclosed global pharmaceutical company, which is located in a major pharmaceutical industry cluster in the U.S. and has been producing major biopharmaceuticals such as anticancer drugs and autoimmune disease treatments for years. Related details, including the name of the acquired company, will be closed to the public until the conclusion of the main contract, which is expected in early October, following consultations between the two sides.
Celltrion expects to be free from all possible future tariff risks by completing the acquisition of a local plant, a fundamental solution to tariff risk hedging, following a mid-term strategy such as relocating two years' worth of inventory to the U.S. and expanding contracts with local CMO, which was preemptively taken to respond to tariffs" he said. If the acquisition of the local plant is completed, it is expected that the main products sold in the United States can be produced locally, completely avoiding tariff risks for those products.
In addition, additional expansion will be launched in consideration of drug sales trends in the U.S. and timelines for new product launches. When the expansion is completed, it is expected that the production capa will be expanded to 1.5 times the level of the second plant in Songdo. The strategy is to increase market responsiveness by expanding the local production capa, while also breaking away from the tariff sphere early on from the follow-up new product lines to be sold in the United States.
Celltrion "50% of the cGMP facilities have the great advantage of being able to exclusively produce biopharmaceuticals of the acquired company for five years through CMO contracts, allowing them to generate revenue immediately after the acquisition.", and expected the recovery of investment to proceed quickly. The remaining 50% plan to produce Celltrion's major products sold in the U.S.
In addition, when the facility expansion is completed in the future, it is expected that the entire cycle of drug production supplied to the United States, such as finished drugs (DP) and packaging logistics bases, will be carried out at local factories. Celltrion said that it has already completed the establishment of a local sales network in the U.S., and that it is expected to strengthen its competitiveness due to a decrease in cost ratio as it can realize cost improvement by direct manufacturing as well as logistics costs.
In addition, it also announced that it plans to significantly strengthen its R&D function in the U.S. if a production base is established through the acquisition of the plant. It also added that the company will conduct a definitive due diligence on local production facilities as soon as possible.
An official from Celltrion said, "Once we conclude the acquisition of the plant, we will secure the best facilities with economic feasibility and business feasibility in the U.S. to completely eliminate U.S. tariff risks in the shortest period of time. As we have an opportunity to accelerate the market share of major products sold in the U.S., we will do our best to take advantage of the opportunity to achieve quantum jump."
This article was translated by Naver AI translator.
