Celltrion to refine its own drug repertoire to recover from slump

Industry

Published: 29 Mar. 2023, 18:26

Celltrion to refine its own drug repertoire to recover from slump

Celltrion founder and chairman Seo Jung-jin speaks about his plan for the company during a press conference Wednesday, a day after returning to the management. [CELLTRION]

Celltrion is working to further develop its own drug repertoire, not just that of its drug biosimilars.

About 40 percent of its annual revenues will come from original drugs in 2030, with the remaining 60 percent from traditional cash cow biosimilar products.

These were a few of the plans announced by founder Seo Jung-jin as part of his efforts to help Celltrion shares rebound from its years of being in a slump.

Seo was appointed as the co-chairman of Celltrion Holdings and three listed Celltrion companies — Celltrion, Celltrion Pharm and Celltrion Healthcare — during a shareholder meeting Tuesday, after two years after he walked away from the management.

His return came upon the request of current management executives as Celltrion shares more than halved from their peak, and shares of Celltrion Pharm and Celltrion Healthcare in particular having plunged by around 70 percent.

“We already applied for approval for Remsima SC as an original drug to the U.S. Food and Drug Administration [FDA], and the result will come out in October,” Seo said.

“A total of 10 new candidates will begin clinical trials in 2024, including four anti-cancer treatments.”

Remsima SC, Celltrion's treatment for autoimmune diseases [CELLTRION]

Biosimilars, according to the FDA, are biological products that are approved based on proof that they are highly similar to other FDA-approved products. The drugs have no clinically meaningful differences in terms of safety or efficacy from the reference product, but they cost less.

“We believe the revenue of Celltrion will increase some 25 percent this year and will see a dramatic jump in 2024,” Seo added.

Seo also hinted about a potential merger and acquisition (M&A) plan, adding that he is on the lookout for potential companies.

“We will narrow down the candidates in the first half and start to look closely in the third quarter,” Seo explained. “We expect the investment size to be about 4 to 5 trillion won [$3 to 3.8 billion].”

Despite the ambitious plans announced by the founder, it seems like they were not enough to satisfy investors’ expectations and calm the angry shareholders.

Celltrion's Yuflyma, a biosimilar referencing AbbVie's Humira that treats autoimmune diseases including rheumatoid arthritis and Crohn's disease [CELLTRION]

Celltrion shares fell 5 percent for two days since Tuesday, the day Seo returned to management. Celltrion Pharm plunged 13 percent, while Celltrion Healthcare plummet 9 percent.

Around 2.5 trillion won of market capital vanished in just two days.

“Shares plunged as investors‘ expectations for the three-way merger collapsed after the shareholder meeting,” said Lee Dong-geun, a researcher from SK Securities.

Seo said he would exert all efforts to make the merger happen within the year, but did not give specific details on the progress.

“Also, Seo failed to give details on the new investment plan including the recent reports of acquiring Baxter International's biopharma solution business," Lee said.

Celltrion said recently it is considering bidding for Illinois-based Baxter International's biopharma solution business, which could cost up to $4 billion. If succeeds, it will be the largest acquisition by a Korean biopharmaceutical company.

Analysts, however, are optimistic about the company’s future.

“Seo’s return is a positive signal in the long term, as he has a very strong leadership in investment and expanding business portfolios,” said analyst Kwon Hae-soon from Eugene Investment.

“Yuflyma will likely go on sale in the third or fourth quarter in the United States, which will largely raise the profitability.

Yuflyma is Celltrion's biosimilar referencing AbbVie's Humira, or adalimumab, that treats autoimmune diseases including rheumatoid arthritis and Crohn's disease. Humira had been the world’s best-selling pharmaceutical for a decade until 2020, when it lost its throne to the Pfizer Covid-19 vaccine.

“This year will be a big moment for Celltrion as it has five biosimilar candidates waiting to apply for approvals in the United States and European countries,” said Heo Hye-min, a healthcare analyst at Kiwoom Securities.

The candidates include CT-P43, a psoriasis treatment Stelara by Janssen Pharmaceuticals, and CT-P42, its biosimilar referencing eye treatment Eylea.

BY SARAH CHEA [chea.sarah@joongang.co.kr]