Celltrion to buy US biologics manufacturing plant as part of tariff response strategy

Celltrion in a notice to shareholders said the company has been designated as the preferred bidder for the acquisition of a biologics manufacturing plant in the United States. The move is part of Celltrion’s response strategy to “evolving” U.S. pharmaceutical tariff policies.

The South Korean manufacturer and exporter of biosimilars said buying the large-scale cGMP drug substance facility, which is currently owned by an undisclosed global pharmaceutical company, is a “fundamental solution” for “fully mitigating” all future tariff-related risks.

“The plant is located within a major pharmaceutical cluster that has been manufacturing key biologics — such as cancer and autoimmune disease treatments — for several years,” according to Celltrion. “Further details, including the name of the company that currently owns the acquired facility, will remain undisclosed until the signing of the final agreement, which is expected to take place in early October, in accordance with mutual agreement.”

While Celltrion didn’t provide financial details of the acquisition, The Korea Herald reported the total cost of acquiring and operating the U.S. facility is expected to reach roughly 700 billion won ($503 million).

In its notice to shareholders, Celltrion said the expanded U.S. facility’s production capacity would be up to 1.5 times the size of the company’s second plant in Songdo, Incheon. Currently, Songdo Plant 2 has a production capacity of 90,000L (six 15,000L lines).

“Once the planned expansions are completed, the local facility will be capable of handling the entire production cycle — from drug substance (DS) and drug product (DP) manufacturing to packaging and distribution — for pharmaceuticals supplied in the U.S.,” according to Celltrion.

In January, Celltrion first announced a proactive plan to get ahead of any potential Trump administration tariffs that might impact the company. At the time, the company conducted an analysis of different scenarios and put in place a short-term, mid-term, and long-term response strategy.

As part of Celltrion’s short-term response, it has completed stockpiling of two years’ worth of inventory within the U.S. The company’s mid-term response includes expanding contracts with local contract manufacturing organizations (CMOs) to enable domestic production for products sold in the U.S. As a potential long-term response, Celltrion has been evaluating the acquisition of manufacturing facilities in the U.S. capable of producing both finished drug products and drug substances.

In its notice to shareholders, Celltrion said approximately 50% of the current capacity at the U.S. facility — for which it has the preferred bidder designation — is under a CMO contract that grants exclusive rights to manufacture the seller’s biologics for five years.

“This will enable Celltrion to generate revenue immediately upon acquisition,” the company said. “We expect a swift return on investment as a result. The remaining 50% of capacity will be allocated to producing Celltrion’s major products currently sold in the U.S.”

Celltrion contends it is South Korea’s largest manufacturer and exporter of biosimilars, with an annual production capacity of 250,000 liters. In 2024, the company also created a wholly owned CDMO subsidiary — Celltrion BioSolutions — to drive growth beyond its core biosimilar business.