Celltrion megamerger to create $9 billion pharma giant

Industry

Published: 25 Oct. 2023, 16:53

Celltrion megamerger to create $9 billion pharma giant

Celltrion founder and chairman Seo Jung-jin speaks about the company's merger plan at a press conference in western Seoul Wednesday. [CELLTRION]

A merger of three listed Celltrion companies will be done by next year to create a pharmaceutical behemoth that logs around 12 trillion won ($8.9 billion) of yearly revenues by 2030, says its founder and chairman Seo Jung-jin.

The journey speeds up as Celltrion's merger with Celltrion Healthcare was approved by their shareholders and its autoimmune disease treatment Zymfentra gained approval from the U.S. Food and Drug Safety Administration (FDA).

"Celltrion's merger with Celltrion Healthcare will proceed smoothly within the year, and then we will merge the resulting company with Celltrion Pharm in six months," said Seo during a press conference Wednesday in western Seoul.

"A merger is what our shareholders really want, and after the successful three-way merger, listing of Celltrion Holdings is also a possible option," Seo said.

The merger comes around three and half years after Seo first announced his plans in January 2020. He retired in March 2021, 19 years after founding Celltrion, but returned to management in March.

Celltrion's Zymfentra, the subcutaneous (SC) formulation of Remsima, a biosimilar to Janssen Biotech's Remicade [CELLTRION]

Celltrion Healthcare is a marketing company that handles the overseas distribution of products developed by Celltrion, a biosimilar company that is currently Korea's 11th largest company by market capitalization. Celltrion Pharm handles the domestic sales for the products developed by Celltrion.

"We already have secured enough funds in case of shareholders' appraisal rights, which could even go over 1 trillion won," Seo said.

National Pension Service, the second largest stakeholder of Celltrion with 7.43 percent, recently abstained from voting. If the organization exercises its right of appraisal, Celltrion may buy its shares which could cost some 1.6 trillion won.

Seo's confidence comes as Celltrion's Zymfentra subcutaneous (SC) formulation of Remsima, a biosimilar to Janssen Biotech's Remicade, won use approval from the FDA last week. It is the first and only FDA-approved SC formulation of infliximab for the treatment of patients with inflammatory bowel disease.

"Zymfentra sales will grow to 7 trillion won at the highest," Seo added. "With Zymfentra, Celltrion will accelerate to become a global biopharmaceutical company that does both new drug development and biosimilars."

Celltrion aims to generate 12 trillion won in revenues by 2030, with around 5 trillion won coming from original drugs.

Celltrion plans to have 22 biosimilar products lineup by 2030. A total of 10 new candidates will begin clinical trials in 2024, including four anti-cancer treatments, Celltrion said.

Biosimilars, according to the FDA, are biological products that are approved based on evidence 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.

Seo also hinted at a possible acquisition of a Japanese company, though "details have not been decided."

Celltrion shares stayed flat at 150,100 won Wednesday.

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