Celltrion eyes Baxter's arm as it gears up for M&As

Celltrion Inc., South Korea’s largest biosimilar maker, said on Tuesday it has studied a possible acquisition of the biopharma solutions unit of the US-based Baxter International Inc., a deal estimated at $4 billion.

Celltrion is understood to vie for the contract manufacturing arm of the healthcare company listed on the New York Stock Exchange, according to a Reuters report.

US scientific instruments maker Thermo Fisher Scientific Inc. and private equity firms such as KKR & Co. and The Carlyle Group have also expressed interest in the unit, the report said.
 
In response, Celltrion said in a regulatory filing: “We have studied an acquisition of Baxter International’s BioPharma Solutions business, but nothing has been determined as of now.”

If Celltrion participates in the bidding and wins the deal, it will mark the largest-ever M&A transaction of a South Korean pharmaceutical and biopharma company. 

The news comes as Celltrion Founder and Honorary Chairman Seo Jung-jin prepares to return to management just two years after his departure to spearhead the biosimilar giant’s global expansion and the combination of its three key units. 

Seo’s return to management will likely get the final nod at its annual general meeting on March 28.

BARGAIN HUNTING OPPORTUNITIES

Seo expressed his intention to hunt for antibody pharmaceutical companies, contract manufacturers of medication, medical device makers and digital healthcare providers as its M&A targets.

Particularly, he will zoom in on faltering companies neglected in the M&A market.

"There will be many opportunities coming up to bargain hunt in the next two years," he told Market Insight, the capital market news outlet of The Korea Economic Daily.

"We will be able to spend 4 trillion won ($3 billion) on M&As, considering our cash and cash equivalents."

"But if the companies are very attractive, we're willing to spend as much as 8 trillion won ($ 6 billion), using acquisition financing," he noted.

RELATIONSHIP WITH BAXTER

Celltrion has already built a relationship with Baxter after outsourcing the US company with the production of Remsima, the world’s first biosimilar monoclonal antibody it developed. 

Baxter’s biopharma solutions unit manufactures and distributes products on a contract basis. 

If Celltrion buys the unit, it will secure biopharma manufacturing and distribution networks in the world’s largest pharmaceutical market.

It also will be able to build production facilities there and speed up the US Food and Drug Administration (FDA) product approval process. 

Baxter’s biopharma production lines are certified by FDA regulations governing Current Good Manufacturing Practices (CGMPs). It also operates about 50 immune monitoring facilities.

Among the other bidders, Thermo Fisher is the world’s largest manufacturer of precision scientific instruments. Its market value hovers around $212 billion on the New York Stock Exchange. 

It has been on a buying spree since 2017, when it acquired Patheon, a Netherlands-based contract development and manufacturing company, for $5.2 billion.

In 2021, it acquired clinical research services provider PPD for $17.4 billion.

(Updated throughout)

Write to Jae-Young Han and Ye-Jin Jun at ace@hankyung.com

Yeonhee Kim edited this article.