Celltrion eyes expansion in biosimilar, CDMO market

(MK database)

Celltrion anticipates an expanded market for biosimilars and contract development and manufacturing (CDMO) services with Donald Trump’s return to office, the company said on Tuesday.

In a post on its website, Celltrion cited a report from the Korea Institute for Industrial Economics & Trade, highlighting that the Trump administration’s policies were favorable to the adoption of generics and biosimilars. The report suggests that a similar shift in industry dynamics might occur with another Trump term.

“Healthcare expenditures in the United States accounted for 17.6 percent of the country’s GDP in 2023,” Celltrion said, emphasizing that Trump’s first administration supported initiatives to reduce drug costs that included bolstering competition, implementing the “American First” order for lowering drug prices, and requiring transparent pricing. Celltrion pointed out that Trump’s previous administration introduced a bill to prevent pharmaceutical companies from providing rebates to the top three pharmacy benefit managers (PBMs) in the United States, a move aimed at controlling drug costs and fostering a favorable environment for biosimilars.

Celltrion also expects positive impacts on the CDMO sector from a biosecurity bill that is currently under review in the U.S. Congress. The biosecurity legislation would restrict government contracts or subsidies with biotechnology companies deemed to pose security risks. According to Celltrion, this would encourage supply chain diversification, especially among allied nations with strong industry infrastructure, such as South Korea, Japan, and India. The company intends to complete the establishment of a CDMO entity by year-end, positioning itself to capture demand from companies seeking alternatives to Chinese suppliers.

Given Trump’s “America First” agenda, Celltrion predicts sustained dollar strength amid trade tensions, inflationary pressures, and higher interest rates, creating favorable business conditions for export-driven firms like itself. “If the won-dollar exchange rate increases, we expect it to further support our export performance in the near term,” Celltrion said.

The company added that under World Trade Organization (WTO) agreements, its products remain exempt from U.S. tariffs, meaning the company is shielded from any future tariff increases.