Seoul: Celltrion Inc., South Korea's leading biopharmaceutical company, announced that its U.S. subsidiary has signed an agreement to acquire a biopharmaceutical production facility in the United States. The acquisition is aimed at addressing potential risks associated with anticipated U.S. tariff increases.
According to Yonhap News Agency, Celltrion USA Inc. will acquire the production facility from Eli Lilly for 460 billion won (US$330 million), with the deal expected to be finalized by the end of the year. The acquisition is part of Celltrion's strategy to mitigate tariff risks by establishing a local production hub in the United States. This move complements earlier measures, such as shipping two years' worth of inventory to the U.S. and expanding local contract manufacturing organization (CMO) agreements.
Celltrion Chairman Seo Jung-jin highlighted that the acquisition provides a comprehensive solution to hedge against tariff risks. The company has created a one-stop supply chain covering the entire drug manufacturing process, from production to commercialization, within the United States.
The company plans to invest a total of 700 billion won in the plant, which includes the acquisition cost and an additional amount for expansion. In July, Celltrion was named the preferred bidder for the 37-acre facility located in Branchburg, New Jersey, along with 10 acres of undeveloped land intended for future expansion to meet growing market demand.
The Branchburg facility is a large-scale, FDA-approved drug substance manufacturing site that complies with current good manufacturing practice (cGMP) regulations. It has a history of producing treatments for cancer and autoimmune diseases. Celltrion plans to continue manufacturing pharmaceuticals for Eli Lilly under a CMO agreement while also producing its own products at the facility.
The acquisition comes in the context of U.S. President Donald Trump's executive order aimed at reducing domestic drug prices by benchmarking them against prices in other countries. The order seeks to address the disparity in prescription drug prices between the U.S. and other advanced economies. Trump has also indicated that tariffs on pharmaceuticals imported into the U.S. could potentially reach up to 250 percent.
Celltrion has been actively expanding its global biosimilar portfolio, increasing the number of approved products from six to 11. The company aims to commercialize 22 biosimilars by 2030 and 41 by 2033, with plans to initiate clinical trials for 13 original drugs by 2035. Its only original drug, Zymfentra, is sold in the U.S. for the treatment of autoimmune diseases.
On Tuesday, Celltrion's stock rose by 8.93 percent to 184,200 won, significantly outperforming the broader Korea Stock Price Index's (KOSPI) 0.51 percent increase.