Celltrion said on the 2nd that it has completed the acquisition of Eli Lilly and Company's biopharmaceutical manufacturing facility in the United States and will begin full-scale contract manufacturing organization (CMO) operations for large-volume pharmaceuticals. By securing a local production base in the U.S., the company aims to reduce tariff and supply chain risks while also ramping up its contract development and manufacturing organization (CDMO) business, which it has designated as a mid- to long-term growth engine.
The company said on the 2nd that on the 31st of last month (local time), it completed the transfer of Lilly's biopharmaceutical manufacturing facility located in Branchburg, New Jersey. The acquisition was completed about five months after it was named the preferred negotiating partner at the end of July last year, and after signing the main contract in September, it finished merger reviews in Ireland and the United States in October–November.
With this acquisition, Celltrion secured an already operating current good manufacturing practice (cGMP) facility instead of building a new plant. Through this, the company expects to structurally escape tariff risks in the United States and to mitigate geopolitical uncertainties by diversifying production bases.
The acquired site is a large-scale campus on a lot of about 45,000 pyeong, consisting of four buildings: a production facility, a logistics warehouse, a technical support building, and an operations building. It can produce about 66,000 liters of drug substance (DS) annually. Celltrion plans to invest an additional 700 billion won to expand capacity to 132,000 liters (L).
The company also won a biopharmaceutical CMO contract worth a total of $473 million (678.7 billion won) from Lilly. The contract runs for three years and can be extended up to four years depending on circumstances. Excluding facility operating costs, Celltrion expects to recoup within a few years the $330 million (476.2 billion won) spent on acquiring the production facility through CMO sales alone.
Celltrion's strategy is to lower costs and reduce logistics expenses through direct local production while boosting both supply chain stability and profitability. Based on the U.S. facility, Celltrion also plans to rapidly expand its influence in the United States, the world's largest pharmaceutical market.
The company has also begun procedures to prepare for commercial production of its own products for U.S. market sales. As a result, the U.S. facility is expected to maintain production and revenue without interruption. The immediate deployment of experienced local personnel through employment succession is also cited as an advantage.
Based on this, Celltrion plans to proactively respond to demand for its own products while actively developing its CDMO business targeting global pharmaceutical companies. Celltrion and its U.S. subsidiary CelltrionUSA will handle capital expenditures and production infrastructure, and Celltrion BioSolutions will oversee global sales and business coordination.
Separately, Celltrion projected it would post record results last year with annual revenue of 4.1163 trillion won and operating profit of 1.1655 trillion won.
A Celltrion official said, "With the passage of the biosecurity law in the United States, local CMO demand is expected to grow significantly, and this acquisition of the production facility is a decision to proactively respond to market changes," adding, "Through capacity expansion and the CDMO business, we will lay the groundwork to leap into a global big pharma."