Vertical Integration
On Aug. 17, Celltrion Inc. announced its decision to merge with Celltrion Healthcare Co. Through its disclosure, Celltrion explained that the decision to merge was made to integrate assets for large-scale investments, enhance cost competitiveness through the integration of development, production, and sales functions, differentiate products, and enhance transparency and investor trust by simplifying transaction structures.
Celltrion anticipated that the merger, given the close correlation between Celltrion and Celltrion Healthcare in terms of business and revenue, will bolster business competitiveness, heighten operational efficiency through vertical integration, and further enhance product competitiveness through swift decision-making.
Before the merger, the cost of products that Celltrion Healthcare, a sales company, could sell was constrained by the prices at which they were purchased from Celltrion. However, post-merger, it’s expected that production costs will align with those of Celltrion, allowing for a more flexible pricing strategy.
Celltrion’s Chairman Seo Jung-jin stated, “By 2030, we aim for an annual revenue of 12 trillion won through the merger of the three companies, with biosimilars accounting for 60% and original new drugs for 40%.” He also mentioned that the approval of Zymfentra (Remsima) is expected in the U.S. in October and that the clinical trials for new drug candidates will commence next year.