Celltrion unfazed by US policy shifts: chair

Korea Herald

15-05-2025

Seo sees US pricing overhaul leveling playing field for biosimilars, affirms W5tr target revenue
Celltrion Group Chair and founder Seo Jung-jin downplayed concerns over potential fallout from recent US policy and tariff changes, saying the South Korean drugmaker remains on track to meet its annual revenue target of 5 trillion won ($3.58 billion) this year.
'Concerns about the impact of recent US policy and tariff changes have been excessively amplified,' Seo said during an online briefing Thursday. 'We see no effect on our business this year, and even next year, it could be an opportunity rather than a risk.'
His remarks come amid mounting investor unease over Washington's efforts to cut drug prices and adopt broader protectionist trade measures. Celltrion shares have fallen 16 percent this year, reflecting wider uncertainty across the sector.
In a briefing aimed at addressing those concerns directly, Seo emphasized the company's preparedness to navigate shifting regulatory and trade dynamics. He said that Celltrion faces no immediate fallout from potential sector-specific tariffs, at least through next year.
'Celltrion has already secured inventory covering 15 to 21 months of US-bound supply,' he said. 'Whatever tariff measures are introduced, they won't affect us until the end of next year.'
The company manufactures active pharmaceutical ingredients in Korea, while finished products are produced through contract manufacturing organizations in Europe and the US. Its US-bound biosimilars — including Remsima, Herzuma and Truxima — are sold via local partners such as Pfizer.
Seo added that Celltrion has secured US-based contract manufacturing capacity for up to 3 million vials, with options to expand to 6 million if needed, providing flexibility to absorb potential tariff shocks.
Still, he voiced caution over building an active pharmaceutical ingredients plant in the US. Constructing a 100,000 liter facility would cost about 1.3 trillion won in Korea, but is nearly 2 trillion won in the US, he said.
'We'll make a careful decision on US infrastructure investment once tariff policy becomes clearer, likely by year-end,' Seo said.
Seo also said the US push to cut drug prices could ultimately benefit Celltrion.
'US drug prices are undeniably high compared to other countries, but that mainly applies to originator biologics,' he said. 'Celltrion focuses on biosimilars, so we're largely unaffected by pricing pressure.'
He blamed inflated drug prices on the complex distribution chain of the US, where pharmacy benefit managers, insurers and wholesalers eat into the margin, creating inefficiencies. Although biosimilars are already sold at discounts of up to 90 percent compared to branded biologics, market penetration remains limited due to entrenched profit-driven intermediaries, he added.
'If the Trump administration simplifies the intermediary distribution system, it would create a more competitive market, one where Celltrion could thrive,' said Seo.
While apologizing for the setback from the delayed launch of its new drug Zymfentra, Celltrion's key treatment for autoimmune diseases, in the US, Seo characterized the impact as minor and offset by other product sales.
According to Seo, the company aims to expand its portfolio by launching 18 new biosimilar products by 2038, bringing the total to 40, while staying on course to begin clinical trials for 13 new drug candidates — including antibody-drug conjugates and bispecific antibodies — by 2035.
Seo reaffirmed the group's full-year target remains intact. 'We're projecting between 4.6 trillion and 5 trillion won,' he said, expressing confidence earnings will rise quarter by quarter, charting a steady upward trajectory. Celltrion reached its target of 3.5 trillion won in revenue last year.
Alongside earnings growth, Seo also pledged to boost shareholder returns and investor confidence.
'We will continue to repurchase and cancel treasury shares, with all newly acquired shares to be canceled,' he said, noting the company has already bought and canceled 450 billion won worth this year and plans to purchase up to 700 billion won more if needed.
Toward the end, the chairman made a personal appeal to investors, reaffirming his long-term commitment to the company amid challenging times.
'I will do everything in my power to ensure stable and sustainable growth for as long as I live,' said the 67-year-old founder. 'I have no intention of selling this company or any part of my stake and plan to grow it and pass it on to my successors. I have about seven years left, and I intend to devote them entirely to Celltrion.'