Celltrion Healthcare Co., an affiliate of South Korea's leading biosimilar maker Celltrion Inc., will set up a sales unit in Europe to generate stable revenue from biosimilars, its CEO has said.
Celltrion Healthcare, which handles Celltrion's overseas business, resorts mainly on local partners for overseas sales of Celltrion's biosimilars, or cheaper generic versions of the pricey patented drugs.
(Yonhap)
"The company is preparing for direct sales of biosimilars in Europe," Celltrion Healthcare CEO and Vice Chairman Kim Hyeong-gi said in a meeting with reporters Tuesday. "It is designed to retain profit down the road and boost price competitiveness."
So far, Celltrion Healthcare has rolled out new biosimilars in Europe, the United States and most other countries via local sales partners, which has increased costs.
The envisioned establishment of a direct sales subsidiary in Europe is widely seen as a move to cope with intensifying industry competition to cut prices. It would remove fees paid to sales agents, thus helping maintain the company's price competitiveness, and secure more stable profits.
In the run-up to direct overseas sales, Celltrion Healthcare has started joint sales in Japan with local partners.
Kim also said sales of Celltrion biosimilars are expected to continue to grow in America. Currently, Celltrion Healthcare sells Remsima, which is effective in treating various diseases from rheumatoid arthritis to Crohn's disease, through Pfizer Inc.
According to Celltrion, Remsima accounted for 8 percent of the US market.
"We are targeting to raise Remsima's US market share to 13 percent to 15 percent by the end of this year," he said. "The situation will become much better when Truxima and Herzuma go on sale after getting approval within this year."
Truxima, which references Roche's MabThera, is used in the treatment of rheumatoid arthritis and non-Hodgkin's lymphoma, a type of cancers that affects the lymph nodes, and other diseases.
Herzuma, a drug based on Herceptin -- originally developed by Swiss pharmaceutical giant Roche Holding -- is a treatment for breast cancer.
Meanwhile, Kim shrugged off market jitters over the falling operating rate of Celltrion's No. 1 plant in Incheon, west of Seoul, and its worsening profitability, which arose after it announced third-quarter profits last week.
Work is under way to double the plant's annual production capacity to 100,000 liters from the current 50,000 liters.
Celltrion has two plants in the western port city.
"It is true that Celltrion's third-quarter results were affected by the temporary shutdown of the No. 1 plant, which resulted in reduced output," he said. "But the expansion of the plant will be soon completed."
Operation of the existing 50,000-liter facility will return to normal in the first half of next year, and the remainder will come on line in the second half, he said, adding the expanded plant will help boost Celltrion's sales and revenue.
Celltrion Inc. said Friday its third-quarter net profit plunged 49 percent on-year to 54.7 billion won (US$48.4 million) due to price cuts and reduced output. The company lowered the price of Truxima, which cures hematologic malignancy, to gain a bigger share in the European market. (Yonhap)
