Pharmaceutical and Bio Industry Shake-up... Celltrion Rises to Number One

Sales Approaching 2 Trillion... Likely to Surpass Industry Leader Yuhan Corporation

[Asia Economy Reporter Cho Hyun-ui] Despite the crisis caused by the novel coronavirus infection (COVID-19), K-Bio has demonstrated its resilience and is causing a seismic shift in the domestic pharmaceutical and bio industry. Not only did exports of domestically produced COVID-19 diagnostic kits surge last year, but the market share of biosimilars (biopharmaceutical generics) overseas increased, and contract manufacturing organization (CMO) orders expanded, enabling K-Bio to repeatedly advance, even surpassing the traditional strong domestic ‘Big 5’ pharmaceutical companies.

◆ Celltrion Becomes Industry Leader = According to related industry sources on the 8th, Celltrion is expected to take the top spot in sales across the domestic pharmaceutical and bio industry. According to the securities information provider FnGuide, Celltrion’s projected annual sales for last year stand at 1.8687 trillion KRW, exceeding the forecast of 1.6042 trillion KRW for Yuhan Corporation, which has held the undisputed number one position since 2016, by more than 260 billion KRW.

Celltrion, which surpassed 1 trillion KRW in sales for the first time in history in 2019, achieved nearly 2 trillion KRW in performance within a year due to the continuous expansion of market share overseas for three biosimilars: Remsima, Herzuma, and Truxima. These products have overtaken or caught up with the original drug market share within five years of entering Europe.

According to pharmaceutical market research firm IQVIA and Celltrion Healthcare, as of the second quarter of last year, Remsima, a biosimilar for autoimmune diseases such as rheumatoid arthritis, held a 55% market share in Europe. This is more than double that of the original drug Remicade (27%) by multinational pharmaceutical company Janssen. Truxima, a biosimilar for non-Hodgkin lymphoma, a type of blood cancer, also held a 37% market share in Europe, showing a level similar to Roche’s original drug Rituxan (36%).

◆ Samsung Biologics Surpasses 1 Trillion KRW for the First Time = Samsung Biologics is likely to achieve annual sales of 1 trillion KRW within nine years of its founding. The estimated annual sales for Samsung Biologics last year are 1.0749 trillion KRW. It already surpassed last year’s sales of 701.6 billion KRW by recording cumulative sales of 789.5 billion KRW in the third quarter. This strong performance is attributed to consecutive CMO contracts with global pharmaceutical companies last year, along with additional orders. Contracts were secured from multinational pharmaceutical company GlaxoSmithKline (GSK) and two Swiss pharmaceutical companies, with further orders from AstraZeneca, Lundbeck, and Cytodine. The total order amount last year was approximately 1.96 trillion KRW, exceeding the combined order amounts from 2016 to 2019.

With the global COVID-19 pandemic increasing demand for pharmaceuticals, Samsung Biologics’ production capacity, which includes the world’s largest single-factory Plant 3, has been recognized. It is also noteworthy that construction of Plant 4 in Songdo, Incheon, began with a completion target of 2023. Plant 4 aims for an annual production capacity of 256,000 liters, surpassing the 180,000 liters of Plant 3 upon completion.

Seegene, boosted by the success of its COVID-19 diagnostic kit business, also surpassed 1 trillion KRW in sales last year. Seegene announced on the 14th of last month that "sales have already exceeded 1 trillion KRW." Due to the surge in demand for COVID-19 related products overseas, including Europe, Seegene recorded consecutive quarterly performance highs starting from the second quarter of last year.

◆ Nine Companies in the ‘1 Trillion KRW Club’ = Amid the remarkable performance of bio companies, it is expected that nine domestic pharmaceutical and bio companies will join the 1 trillion KRW club this year. Among them, three are bio companies and six are pharmaceutical companies. This is a threefold increase in just one year since Celltrion was the only bio company to make the list last year.

An industry insider said, "The fact that bio companies are consecutively entering the 1 trillion KRW club signals a seismic shift in the industry," adding, "It is analyzed that the domestic bio industry has entered a full-fledged growth trajectory." In the pharmaceutical sector, Yuhan Corporation, GC Green Cross, Kolmar Korea, Chong Kun Dang, Kwangdong Pharmaceutical, and Hanmi Pharmaceutical are expected to exceed annual sales of 1 trillion KRW.