Celltrion has established a local production system and anticipates growth as a result. The U.S. Trump administration has finalized plans to impose tariffs on specific categories of bio and pharmaceutical products, but biosimilars are exempt from these tariffs. Consequently, Celltrion is now entirely unaffected by U.S. pharmaceutical tariffs.
Celltrion announced on the 6th that the tariff impacts on its business, prompted by the “adjustment of imports of pharmaceuticals and pharmaceutical raw materials to the United States” unveiled by the Trump administration, have essentially been resolved. The U.S. government introduced these measures to encourage the repatriation of the pharmaceutical supply chain. Nevertheless, biosimilars have been excluded from tariff imposition and will be reassessed in a year.
As a result, there is no impact on the sales of Celltrion’s biosimilar products in the U.S., as biosimilars account for most of its sales in this market. This development allows Celltrion to stably operate its sales and marketing strategies locally. Furthermore, Celltrion plans to gradually establish a local production base at its Branchburg plant to adapt to potential changes in U.S. biosimilar policies and produce products sold in the U.S.
The infliximab subcutaneous therapy ‘Zympentra’, which is being sold as a new drug in the U.S., is also set to have its drug substance (DS) produced at the Branchburg plant in New Jersey, ensuring it remains unaffected by tariffs. Celltrion has already completed the technology transfer necessary for Zympentra production at this facility and intends to produce not only Zympentra but all products sold in the U.S. at this local plant.
Particularly, since Celltrion has completed the establishment of a local production system that can fundamentally avoid U.S. tariff risks, the company will be structurally outside the impact area even if U.S. tariff policies change again. Celltrion has decided on an additional 75,000L expansion at the Branchburg facility, which will increase the total production capacity there from the current 66,000L to 141,000L based on drug substance production. This will not only enhance local production capabilities but also significantly strengthen global contract manufacturing (CMO) order capacity, paving the way for increased sales growth through CMO business expansion.
The enhancement of direct sales competitiveness based on U.S. local production is also anticipated. This is especially significant as Zympentra has entered a robust growth phase, recording the highest monthly prescription volume ever with over threefold increase in prescription volume compared to last year. If tariff-free production through local facilities adds to its price competitiveness, the growth momentum is expected to accelerate further. Moreover, accounting for the reduction in logistics and transportation costs, Celltrion’s price competitiveness is expected to increase compared to other companies.
A Celltrion representative stated, “Strengthening competitive direct sales through local production and expanding new business opportunities are positive,” and added, “We will further accelerate growth in the U.S. market by expanding prescriptions for key products, including Zympentra, and by enlarging our CMO business.”