Celltrion Inc., South Korea’s biosimilar-developing leader, is in talks with Eli Lilly and Company to buy the American multinational pharmaceutical behemoth’s plant in the US for about 700 billion won ($504.3 million), according to people familiar with the matter on Thursday.
Located in Branchburg, New Jersey, the facility currently produces biologic medicines for Eli Lilly, and it would continue producing the US pharma company’s products for the next five years alongside Celltrion’s biosimilars, with no layoffs among existing manufacturing and R&D staff after the acquisition, the people said.
As the preferred bidder, the Korean company is reportedly ironing out detailed terms, including the acquisition price, with the US company, with the aim of signing a binding agreement in October.
Celltrion plans to invest an additional 300 billion to 700 billion won to ramp up the plant’s production capacity, bringing total investment to as much as 1.4 trillion won.
The news comes about two weeks after the Korean biosimilar giant’s Chairman Seo Jung-jin unveiled a plan to spend roughly 700 billion won initially to buy a plant in the US.
The company again declined to confirm the name of the plant’s owner and financial terms, citing a confidentiality agreement.
FIRST US PRODUCTION SITE
If completed, the deal would give Celltrion its first drug manufacturing site in the US, a move aimed at avoiding tariffs that could reach up to 250% on its biosimilars.
The US plant is expected to enable the Korean company to locally produce nearly all of its flagship biosimilars for the world’s largest pharmaceutical market.
Celltrion is projected to produce autoimmune treatments Zymfentra and Yuflyma, as well as a targeted therapy anticancer medication, Vegzelma, at the US facility, starting in the fourth quarter of next year.
After expansion, the US manufacturing facility is expected to support the entire production cycle for Celltrion’s US product lineup.
The Korean biosimilar giant has been seeking a US manufacturing base since early this year in response to Washington’s warnings of steep tariffs on imported medicines. Its executives have scouted potential sites since April, the people said.
Last week, Seoul and Washington reached a new trade agreement ensuring most-favored nation (MFN) treatment for Korean chipmakers and pharmaceutical companies, setting tariffs of about 15% on Korean chip and drug imports.
Chairman Seo still sees US duties as a risk beyond the current Trump administration and is pushing to secure local manufacturing to minimize damages to Celltrion’s US sales.
Following the acquisition, the Korean biosimilar company plans to expand US market share in its total sales from the current 30%.
After handing over the Branchburg plant, Eli Lilly, the developer of well-known diabetes and obesity treatment Mounjaro, is expected to focus on the development of peptide therapeutics, small molecules and nucleic acid therapeutics, according to the people.
By Dae-Kyu Ahn and Yoo-Rim Kim
powerzanic@hankyung.com
Sookyung Seo edited this article.
