Celltrion to merge with sales unit to enhance synergy

Celltrion logo (Park Hyun-koo/The Korea Herald)

South Korean pharmaceutical company Celltrion said Thursday it will merge with its sales unit, Celltrion Healthcare, next month to enhance business synergy and operational efficiency.

“The boards of both companies have approved the merger proposal,” Celltrion Chairman Seo Jung-jin said during a livestreamed online briefing later in the day. “The merger will be completed by Dec. 28.”

According to the company, for every 1 share, Celltrion Healthcare's shareholders will get 0.45 shares of the merged entity. The prices of Celltrion and Celltrion Healthcare shares have been fixed at 148,853 won ($110.94) and 66,874 won, respectively for this merger.

Celltrion Pharm, its chemical drugs-producing unit and one of the three-listed companies affiliated with Celltrion Group, was not included in this latest merger plan due to possible conflicts of interest among shareholders.

Seo, however, hinted that Celltrion will embark on a separate process to merge with Celltrion Pharm within six months after completing the first merger between Celltrion and Celltrion Healthcare.

“The planned mergers will streamline the operations of each company, improving both efficiency and profitability,” Seo said.

To date, Celltrion has been focusing on the production and development of bio-pharmaceutical products, whereas Celltrion Healthcare has been responsible for selling the products.

Seo stressed that the vertical integration of development, production, sales and marketing units is a necessary step in order to compete in the global pharmaceutical market.

Seo added that large-sized investments will be made after completing its merger processes. The investments will be made for in-licensing, development of novel drugs and mergers and acquisitions.

“Celltrion will continue to pour resources into nurturing its drug development capabilities,” he said.

Celltrion aims to ramp up its revenue to 12 trillion won by 2030. In the longer term, Seo said biosimilar sales will make up 60 percent of total sales, while the remaining 40 percent will come from novel drug sales.

By Shim Woo-hyun(ws@heraldcorp.com)