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Celltrion chairman hints at aggressive M&As this year

March 29, 2023 - 16:25 By Shim Woo-hyun

Celltrion Chairman Seo Jung-jin speaks during an online press conference held Wednesday. (Celltrion)

Celltrion's founder and returned chairman Seo Jung-jin said the company will be able to secure some 5 trillion won ($3.8 billion) for mergers and acquisitions of pharmaceutical and biotechnology firms, through which the company aims to boost its new drug development capability. The company also plans to build its fourth manufacturing plant in the US, according to the chairman.

"After the first half this year, the number of M&A candidates will come down to around 10, and the company will be able to prepare some 4 to 5 trillion won for the investment by the third or fourth quarter this year," Seo said during an online conference held Wednesday.

Seo said overseas biotech firms are the company's main M&A targets. “(Celltrion) is looking for drug development companies that have their own platforms.”

Celltrion’s investment plan in drug developers is in line with the company’s goal to expand its pipelines for new drugs.

The goal of the investment is to make a shift from a biosimilar maker and step up as an international original drug developer.

Seo noted that by 2030, the company aims to elevate original drug sales to account for up to 40 percent of its total sales.

Next year, Celltrion will be able to secure a total of 10 new drug candidates, consisting of six antibody drugs and four anticancer drugs, and the company will hopefully receive regulatory approvals and begin sales of six new drugs by 2030, according to Seo.

“Celltrion will conduct clinical trials of some of the new drug candidates on its own, but it will also consider partnering with international pharmaceutical companies,” Seo said. Licensing out its drug candidates is also one of the options to reduce risks in developing new drugs, he added.

In the meantime, the number of biosimilar pipelines will reach 21 by 2030.

In line with expansion of its pipelines, Seo said the company’s sales are expected to go up by 20-30 percent this year, and significantly more in the years to follow.

Seo also announced the company's plan to build its new manufacturing facility in the US, in line with President Joe Biden's wide-ranging executive order to bolster US-based biomanufacturing.

“When the Biden administration unveils more specific guidelines, Celltrion will embark on discussions with the US government regarding the construction of a biomanufacturing facility in the US,” Seo said, adding it would take at least one year to make an official announcement on the upcoming plant.

Celltrion previously considered building its fourth manufacturing plant in China with a combined manufacturing capacity of 120,000 liters, but the company postponed the plan due to the COVID-19 pandemic.

When asked about the company’s delayed three-way merger of three listed Celltrion companies -- Celltrion, Celltrion Pharm and Celltrion Healthcare – Seo noted the planned merger could be finalized by the end of this year.

The merged company will then take initiatives to its business areas, including development of digital health care platforms and the production and sales of medical supplies that go to hospitals.

Seo added that Celltrion will consider M&As in the digital health care industry if needed, although the investment is expected to take in foreign markets where digital health care firms are relatively freer of regulations.

Meanwhile, Seo made a comeback as the chairman of Celltrion Holdings and three listed Celltrion companies during a shareholders meeting on Tuesday. His current term will last for two years.

Seo's return comes about two years after he stepped down from the top post. At the time, he hinted he could come back if necessary. Amid prolonged uncertainties in the global economy, the chairman is expected to expedite urgent business decisions on Celltrion's global expansion, especially in the all-important US market.