Celltrion Completes U.S. Plant Acquisition, Ushering in a New Era of Global Manufacturing

Ownership Transfer Completed Through Deal Closing
Rapid Acquisition Achieved in Just Five Months

On December 31, Celltrion announced that it had completed the transfer of Eli Lilly's biopharmaceutical manufacturing facility in Branchburg, New Jersey, and will officially begin contract manufacturing operations (CMO) for pharmaceuticals worth approximately 678.7 billion won (473 million US dollars) entrusted by Lilly. The completion of this acquisition process comes about five months after Celltrion was selected as the preferred negotiating partner at the end of July last year.

Seo Jungjin, Chairman of Celltrion. Photo by Yonhap News

Securing First U.S. Production Base... Plans to Expand Capacity to 132,000 Liters with Additional Investment

Instead of building a new plant that would require significant capital and time, Celltrion is evaluated to have shortened the timeline for securing a global production base and minimized related risks by acquiring an existing facility already operating in compliance with current Good Manufacturing Practice (cGMP) standards.

Additionally, with this acquisition, Celltrion has structurally escaped tariff risks and achieved effects such as mitigating geopolitical uncertainties through diversification of production bases. The company plans to maximize profitability, efficiency, and stability by improving cost structure through direct manufacturing, reducing logistics costs by selling directly in the local market, and strengthening supply chains, thereby rapidly expanding its influence in the United States, the world's largest pharmaceutical market.

In particular, under the contract with Lilly, Celltrion will supply biopharmaceuticals worth about 678.7 billion won over three years until 2029, but the contract period has been set at four years to account for contingencies. Excluding facility operating costs, the investment made for the acquisition of the production facility (about 330 million US dollars) will be recovered in just a few years through CMO sales alone.

At the same time, Celltrion has begun commercialization procedures, such as validation for its own products to be sold in the U.S. market, ensuring continuous production and revenue generation at the U.S. facility without interruption. Furthermore, through employment succession agreements, the company has secured continuity and expertise by enabling skilled local personnel to immediately continue production.

The U.S. production facility acquired by Celltrion is a large-scale campus with four buildings, including a production plant, logistics warehouse, technical support building, and operations building, on a site of approximately 148,760 square meters (about 45,000 pyeong). It is capable of producing about 66,000 liters of drug substance (DS). The company plans to immediately begin expansion procedures, investing an additional 700 billion won to increase total production capacity to 132,000 liters.

Expanding Business into U.S.-Based CDMO

Through this, Celltrion aims not only to proactively respond to the increasing global demand for its products, including in the United States, but also to actively pursue contract development and manufacturing organization (CDMO) business targeting global pharmaceutical companies.

Celltrion factory workers are carrying out the final assembly process. Photo by Hyunmin Kim

Celltrion and its U.S. subsidiary CelltrionUSA will focus on facility investment and production infrastructure, while Celltrion's affiliate Celltrion BioSolutions will handle global sales and project management. Under the strategy of making the CDMO business a future growth engine, Celltrion plans to flexibly respond to changes in the external environment, such as U.S. tariff policies, and strengthen its responsiveness to global clients.

Meanwhile, Celltrion has forecast record-high annual sales and operating profit for last year, and is expected to continue its rapid growth based on a new product-driven growth strategy and the U.S. production facility. In its disclosure on December 31, Celltrion projected consolidated sales of 1.2839 trillion won in the fourth quarter of last year, up 20.7% year-on-year, and operating profit of 472.2 billion won, up 140.4% over the same period. If these forecasts are confirmed, annual sales for last year will reach 4.1163 trillion won, up 15.7% year-on-year, and operating profit will be 1.1655 trillion won, up 136.9%.

Furthermore, starting this year, the company plans to immediately generate CMO revenue through the U.S. production facility, expand revenue streams into CDMO, and significantly increase profits by expanding U.S.-bound products manufactured locally at reduced costs. In addition, Celltrion will focus on solid growth by increasing the sales proportion of new products with high net profit margins.

A Celltrion official stated, "With the recent passage of the Biosecurity Act in the United States, demand for local CMO services by global biotech companies is expected to surge. Through this acquisition of a U.S. production facility, Celltrion will be able to respond to these market changes more proactively and aggressively." The official added, "Furthermore, with the immediate CMO contract with Lilly following the acquisition, the U.S. plant is expected to record significant sales this year."

The official continued, "We will also begin expansion procedures to significantly strengthen our production capacity and accelerate our new CDMO business, doing our utmost to grow into a global big pharma company."