Celltrion to merge with global sales affiliate by end-2023

South Korean pharmaceutical giant Celltrion Group has begun procedures to merge biopharmaceuticals developer and producer Celltrion Inc. with global drug sales firm Celltrion Healthcare Co. to save costs and enhance business transparency.

Celltrion said on Thursday its board of directors has approved the plan. The company aims to hold a shareholders’ meeting for the agenda on Oct. 23 and complete the merger by Dec. 28 of this year.

It will also merge chemical drugs development and local distribution affiliate Celltrion Pharm Inc. around July 2024, the company added.

On the merger this year, Celltrion will issue new shares in Celltrion Healthcare for the existing shareholders of the overseas sales affiliate.  The merger price per share is 148,853 won ($111.3) for Celltrion and 66,874 won for Celltrion Healthcare – which results in some 0.45 of a Celltrion share for each Celltrion Healthcare stake.

The group aims to list the new shares with the merger on Jan. 12, 2024.

POST-MERGER PLANS

“The merger will simplify Celltrion Group’s transaction structure and enhance its business transparency,” said group founder and Chairman Seo Jung-jin at a press conference via an online platform on Thursday.

The group has a wide range of business from biopharmaceutical and chemical drug development  to local and overseas sales with the three major affiliates – Celltrion, Celltrion Healthcare and Celltrion Pharm.

Its intra-group transactions amounted to 42% of revenue in 2022, the highest among the 76 Korean conglomerates obliged to disclose details on such transactions for the year.

“We will carry out large-scale investments in specific businesses – our in-house new drugs, license-in, digital healthcare and mergers and acquisitions from next year. Also, the merged entity will strive to maximize global sales with price competitiveness,” said Seo.

The group aims for 12 trillion won of yearly revenue by 2030, with 60% from biosimilar sales and 40% from original biologic products. It plans to raise the number of commercialized biosimilars from the current six to 22 by the same year, Seo added.

The founder expects Remsima SC, the subcutaneous injection of infliximab that targets immune-system diseases like rheumatoid arthritis, to receive marketing approval from the US Food and Drug Administration by end-October. The biosimilar will be branded as Zymfentra in the country.

The group will conduct phase I clinical trials of the two new drugs, Seo added.

Celltrion is constructing its third plant in Songdo, Incheon and plans to begin commercial operations next year. The new factory will raise the company’s biologics production from cell culture incubators to 250,000 liters a year.

The merged entity will strengthen its global market dominance through direct distribution channels and provide a stable supply of medicine with expanded manufacturing, the founder said.

Write to Dae-Kyu Ahn and Jeong Min Nam at powerzanic@hankyung.com


Jihyun Kim edited this article.