Resolving tariff risks and strengthening competitiveness in the world's largest market...Celltrion Signs Main Contract To Acquire Eli Lilly Factory
Sep 23, 2025
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On July 29, it announced that it was selected as the preferred bidder to acquire companies with U.S. raw drug facilities, beating two global companies, and the very company turned out to be Eli Lilly. Celltrion's U.S. subsidiary will take over, and the two companies will cooperate with the goal of ending the process of acquiring the factory under the contract by the end of the year.
The plant to be acquired is a large campus with a total of four buildings, including a production facility, a logistics warehouse, a technical support building, and an operation building, on a 45,000 pyeong site in Branchburg, New Jersey. As it has an idle site of about 11,000 pyeong for the expansion of Capa, it is expected that it will be able to preemptively respond to the increase in market demand in the future through expansion. Celltrion plans to invest a total of 700 billion won in initial operating costs, including the purchase of the plant, and then make an additional investment of at least 700 billion won to expand production facilities on idle sites in the acquisition plant.
Celltrion said the acquisition agreement completed a comprehensive plan to respond to tariffs proposed by Celltrion Group Chairman Seo Jeong-jin in May. Following the mid-term strategy of relocating two years' worth of inventory to the United States and expanding local CMO contracts, which were preemptively taken to respond to tariffs, the fundamental solution of securing local production plants has been prepared.
Celltrion said it is expected to be free from all possible tariff risks in the future. If changes and expansion of production facilities are realized in the future, not only Celltrion's flagship products in the U.S. but also products that will be released in the future will be released from the tariff sphere early.
In addition, the plant can be operated immediately after acquisition as a bio-material drug (DS) cGMP production facility that is already in operation, significantly advancing the time of production of its products compared to the construction of a new plant that costs more than five years and trillions (兆) of units, and the input cost is low. It also plans to quickly start expanding facilities to produce major products on idle sites secured in the acquisition plant. When the expansion is completed, it is expected to secure a production capa 1.5 times that of the second plant in Songdo, Incheon.
In addition, the contract includes the full employment succession of local personnel with experience and expertise in operating the factory, allowing them to continue operating stability and productivity while operating the factory without a manpower gap.
Meanwhile, the company also signed a CMO contract with Lily, securing a strong growth engine at the same time as setting up a production base in the U.S. Under the contract, Celltrion will steadily supply raw materials produced at the plant to Lily, which is expected to expand sales and recover investments early.
It is explained that by securing a local production base, it will be able to have a one-stop supply chain in the market that covers the entire cycle of drug production from production to sales. In addition, product competitiveness in the U.S. is expected to be greatly strengthened as it can significantly reduce production costs compared to outsourced CMOs, including US-oriented (向) logistics costs.
Celltrion-Lily decided to continue its cooperation system until the acquisition plant has a new operating system for smooth business transfer.
Edgardo Hernandez, Lilly's executive vice president and president of the manufacturing division, said "The Branchburg plant, which has been one of Lilly's production bases for the past 17 years, has safely produced high-quality medicines and demonstrated the expertise, responsibility, and commitment of the local team."We are deeply grateful for the dedication and contribution of Lily's employees to her mission over the years."
An official from Celltrion said, `This acquisition has completely eliminated U.S. tariff risks and secured a unified local supply chain from production to sales of our flagship products.' `We plan to complete post-acquisition procedures such as plant efficiency and transfer work as soon as possible.' "Even after the acquisition, we will do our best to expand our production capacity through continuous investment and strengthen our global competitive advantage as a global leader."," he added.
This article was translated by Naver AI translator.
