Seo Jung-Jin, chairman of the Celltrion Group, returned as chair of the shareholders meeting for the first time in 11 years. Analysts said the move reflects a determination to address the recent death of an employee who fell at the Incheon Songdo plant. Seo told shareholders he was sorry for causing them distress.
Seo spoke at the 35th regular shareholders meeting held at Songdo Convensia at 10 a.m. on the 24th. It was the first time since 2015 that Seo served as chair of the shareholders meeting. He said an unfortunate incident occurred during piping work at the Songdo plant and, because it happened in the course of duty, the company would examine it closely and faithfully do what it must.
Seo set targets this year of 5.3 trillion won in consolidation revenue and 1.8 trillion won in operating profit. He said the company aims to raise quarterly operating profit to 300 billion won in the first quarter, 400 billion won in the second, 500 billion won in the third, and 600 billion won in the fourth. Celltrion posted 4.1625 trillion won in consolidation revenue and 1.1685 trillion won in operating profit last year.
Seo said the Middle East risk unfolding around the world would not have a major impact on the company and, as an export-oriented business, a strong won-dollar exchange rate has some advantages. He added that while biosimilar competitors sometimes dump products overseas at low prices, Celltrion would not enter the market at prices that are too cheap.
Celltrion is developing a quadruple-action obesity treatment candidate. Seo said the company will conduct animal tests for the obesity treatment in May this year and, if the results are favorable, begin phase 1 clinical trials next year. He said the goal is consistent weight loss so there are no cases where some people lose weight and others do not, and the company will work to reduce side effects such as vomiting, abdominal pain, and muscle loss.
One shareholder said, when will we have to wait for results to be reflected from clinical trials to commercialization for an obesity treatment, adding, I am going to starve. Current products are more important.
Celltrion is also developing antibody-drug conjugate (ADC) candidates. The company said the ADC candidates have been designated for fast track by the U.S. Food and Drug Administration (FDA), allowing for expedited review. ADCs are next-generation cancer therapies that attach a drug payload to an antibody to precisely destroy cancer cells.
Shareholders leveled sharp criticism during the meeting, which ran for nearly three hours. Celltrion's share price climbed to the 400,000-won range at the close on Dec. 7, 2020, when COVID-19 was at its peak, but it now remains in the 190,000–200,000-won range.
Shareholders reacted with comments such as, When will Celltrion's share price rise in the KOSPI 5000 era, I held Celltrion shares even when others pointed fingers, What measures are there to resolve the stock's undervaluation, and Zymfentra's sales also seem to be coming in below expectations. Zymfentra is a product that converts the autoimmune disease treatment Remsima into a subcutaneous injection formulation.
Seo said semiconductor, defense, and shipbuilding are driving stock gains, and it is regrettable that other bio industries do not seem to be keeping pace. He added he would practice responsible management as a major shareholder. He also said Zymfentra has relationships with U.S. insurers and, looking at prescribing data, the company will not deliver a disappointing performance.
At the meeting, shareholders approved a plan to pay a dividend of 750 won per common share. Seo said that starting this year, one-third of after-tax profit will be returned to shareholders as dividends, one-third will be invested, and one-third will be retained as cash. Celltrion also resolved to cancel 171.54 billion won worth of treasury shares.
Seo said some shareholders have sent abusive text messages to other executives and expressed hope that relations could return to the good terms of the past. He said he hopes the next shareholders meeting will have a festive atmosphere.