Celltrion has acquired the antibody drug production plant of global pharmaceutical company Eli Lilly in Branchburg, New Jersey, to counter the U.S. government's stringent pharmaceutical tariff policies. By establishing a production base in the U.S., the company aims to mitigate long-term tariff risks and further expand into the contract manufacturing organization (CMO) business.

On the 23rd, Celltrion announced that its U.S. subsidiary, CelltrionUSA, acquired Eli Lilly's New Jersey production plant for KRW 460 billion. Including the funds for plant operation, a total of KRW 700 billion will be invested. The initial investment funds will be raised through a capital increase by CelltrionUSA.

The Eli Lilly plant acquired by Celltrion spans a total of 148,760m² (approximately 45,000 pyeong) and includes pharmaceutical production facilities, a logistics warehouse, a technical support building, and an operations building. Among these, 36,363m² (approximately 11,000 pyeong) is an idle site available for additional production facilities. Celltrion plans to invest an additional KRW 700 billion to expand production facilities based on U.S. pharmaceutical demand, which could bring the total investment in this plant to KRW 1.4 trillion.

In an online press conference held that day, Seo Jung-jin, Chairman of Celltrion Group, stated, “If additional production facilities are constructed, we will secure a production scale about 1.5 times that of the current Songdo Plant 2,” adding, “This will allow for not only the export of Celltrion products to the U.S. but also additional CMO business.”

However, although the plant has been acquired, Celltrion's products will not be immediately produced there. Chairman Seo mentioned, “It will take about a year to obtain production approval from the U.S. Food and Drug Administration (FDA),” and projected that “production of Celltrion products will be possible from 2027.” Half of the plant will be used for the U.S. supply of Celltrion products, while the other half will continue to produce Eli Lilly's existing products. A CMO contract with Eli Lilly was signed alongside the plant acquisition, and CMO revenue will be reflected in Celltrion's sales from next year.

Celltrion's large-scale investment is ultimately aimed at addressing long-term tariff risks.

Chairman Seo predicted that the current tariff policies of the Donald Trump administration would continue into the next administration. He stated, “Even if a new administration comes, the approach may differ, but the current government's tariffs will not be undone,” emphasizing that “with this acquisition, Celltrion has completely escaped tariff risks.”

Previously in August, President Trump stated, “Initially, small tariffs will be imposed, but within a year to a year and a half, tariffs will rise to 150%,” and “thereafter, they will increase to 250% to ensure pharmaceuticals are produced within the U.S.” President Trump has also recently indicated that higher tariff rates could apply to pharmaceuticals than to automobiles (25%), signaling high tariffs on pharmaceuticals.

Meanwhile, as more companies seek to acquire U.S. production plants, the value of U.S. pharmaceutical production plants is rapidly increasing. Recently, a CMO company plant called Cambrex in North Carolina was put up for sale for approximately USD 4 billion (about KRW 5.57 trillion), nearly double the price compared to six years ago. Chairman Seo commented, “Considering U.S. tariffs, skilled local plant personnel, and logistics costs comprehensively, acquiring a local plant is seen as a way to significantly reduce costs.”

Popular News