Celltrion-Humasis 'Diagnostic Kit Dispute' Counterlawsuit... "Will Hold Fully Accountable"

Celltrion "Compensate for Supply Delays"
Humasis "Contract Terminated Demanding Price Reduction"

[Asia Economy Reporter Myunghwan Lee] The conflict between Celltrion and Humasis over the delivery of diagnostic kits has escalated into a lawsuit battle.

On the 13th, Celltrion announced that it had received the complaint for damages lawsuit filed by Humasis, its COVID-19 diagnostic kit business partner, against the company. Celltrion plans to actively respond through legal procedures via its legal representatives.

Earlier, on the 31st of last month, Celltrion also filed a lawsuit against Humasis claiming damages and the return of advance payments. The claim is that Humasis should compensate for the delay penalties arising from the contract due to delayed supply of diagnostic kits, as well as damages exceeding those penalties. Celltrion also argues that the remaining amount of the advance payment already made, corresponding to the canceled portion of the contract, must be returned.

The dispute between the two parties began over the delivery schedule of COVID-19 diagnostic kits. According to Celltrion, the two companies signed a joint research and supply contract in June 2020 for the development, commercialization, and supply of COVID-19 antigen rapid diagnostic kits. Following the contract, they completed the development and commercialization of professional-use and personal-use antigen rapid diagnostic kits and began full-scale supply to the U.S. market through Celltrion's U.S. subsidiary. Subsequently, as demand for the diagnostic kits surged rapidly, Humasis repeatedly failed to meet delivery deadlines. Celltrion claims that Humasis continuously missed delivery deadlines from around October 2021 and even issued an official apology regarding this.

On the other hand, Humasis claims that Celltrion made excessive demands. According to Humasis, in April of last year, Celltrion requested a halt in production and an extension of delivery deadlines citing poor sales performance. As the delivery date approached, Celltrion demanded a price reduction of more than half compared to the original price, which Humasis could not accept. When Humasis refused the price reduction, Celltrion allegedly claimed contract termination. According to Humasis, the total contract amount between the two companies is approximately 401.2 billion KRW. Of this, 74.26% or 297.9 billion KRW has been fulfilled, while 25.74% or 103.3 billion KRW remains unfulfilled.

Humasis COVID-19 self-test diagnostic kit 'Humasis COVID-19 Home Test' is being sold at a pharmacy in Seoul. Photo by Mun Ho-nam munonam@

Given the sharp confrontation between the two companies, it is expected to take considerable time before a conclusion is reached. A Celltrion official stated, "While Humasis delayed the delivery of quantities, the market price for diagnostic kits was plummeting, and Celltrion had to bear significant inventory and related operating losses. We will hold them fully accountable for causing substantial damage to a partner company that was entirely dependent on Humasis's supply in a supplier-dominant market by failing to properly fulfill the contract while neglecting their responsibilities as joint developers."

Humasis has also decided to actively respond to the lawsuit following a change in company ownership. Artist Cosmetic advanced the payment of the acquisition balance by two weeks and became the largest shareholder. The company explained that this move is to promptly respond to the lawsuit with Celltrion while promoting new business initiatives.