Celltrion discloses $517 mln investment to build production base in China

24, Jan. 2020

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SEOUL, AJU - Celltrion, a South Korean bio firm which produces Remsima, a copy of Janssen Biotech's Remicade treating rheumatoid arthritis and Crohn's disease, will build a plant in Wuhan, the capital of China's Hubei province, in a project to use it as a global production base with an investment of 600 billion won ($517 million) for five years until 2025.

Celltrion said Tuesday that a business agreement was signed in a ceremony on January 20 in Wuhan. A groundbreaking ceremony will be held during the first half of this year. Celltrion will also establish a direct sales network in China.

The plant in Wuhan will not only produce biologic drugs, but also serve as manufacturing organization (CMO), which is a company that serves other companies to provide comprehensive services from development through manufacturing. The popularity of pharmaceutical outsourcing has grown and companies are increasingly outsourcing to CMOs due to the benefits outside expertise can bring to their business.

Celltrion aims to nurture its subsidiary in Wuhan as a global-class bio company with the largest number of pipelines in China. "There is a great demand for high-quality medicines in China, which is the world's second-largest market," Celltrion CEO Gi Woo-seong said.

"Since Celltrion Group has directly entered the Chinese market, it will provide world-class Celltrion biosimilar drugs to Chinese patients in a speedy manner, thereby concentrating all of its capabilities to help Celltrion Group make a second leap forward," Gi said.

Celltrion Chairman Seo Jung-jin said at this year's J.P. Morgan Healthcare Conference in San Francisco that a portfolio of 16 products tailored for the Chinese market will be set up by 2030. He said Celltrion would also tap into the global diabetes market.

In November 2019, Celltrion acquired final approval to sell Remsima SC, the subcutaneous injection of Remsima, in Europe. The company plans to acquire U.S. approval in 2022. The target of Remsima SC is patients who are forced to move on to expensive secondary treatments due to resistance. Instead of an intravenous injection that takes more than two hours in hospital, patients can inject Remsima SC into the fat layer beneath the skin at home.

With Remsima SC, Celltrion has adopted an aggressive strategy to secure profitability and price penetration in competition with other subcutaneous-type products such as Adalimumab, sold under the brand name of Humira, which is on the World Health Organization's List of essential medicines.