Celltrion: "U.S. Pharmaceutical Tariff Impact Fully Resolved"

Regulations Focused on Patented Pharmaceuticals and Ingredients

No Impact Thanks to Local Production System in Place

Celltrion announced that, as of April 2 (local time), the tariff impact on its business has effectively been resolved due to the 'Adjustment of Imports of Pharmaceuticals and Pharmaceutical Ingredients into the United States' announced by the Trump Administration. The company also expects that business growth opportunities will further expand in the mid- to long-term.

Overview of Celltrion Plant 2 in Songdo, Incheon. / Incheon - Photo by Kim Hyunmin

US Government Announces Tariffs on Pharmaceuticals... Biosimilars Exempt from Tariffs

The U.S. government announced this measure to encourage reshoring of the pharmaceutical supply chain. As a result, ▲ a 100% tariff will be imposed on the import of patented pharmaceuticals and related ingredients that are not produced in the United States or have not entered into price negotiations with the government. ▲ In terms of differentiated tariffs by country, Korea will face a 15% tariff on pharmaceuticals, considering the existing trade agreements between the two countries. Additionally, ▲ companies that have signed Most Favored Nation (MFN) price agreements with the U.S. Department of Health and Human Services (HHS) and maintain local production facilities in the U.S. may also be eligible for tariff exemptions.

Notably, biosimilars—which account for the majority of Celltrion's sales in the U.S.—have been excluded from the scope of tariffs under this measure and will be subject to review again after one year.

As a result of this measure, there will be no impact on the sales of Celltrion's biosimilar products in the United States, providing a stable foundation for the company to operate its local sales and marketing strategies. Furthermore, in response to potential policy changes regarding biosimilars, Celltrion plans to incrementally establish local manufacturing capabilities at its Branchburg plant for products sold in the U.S.

‘Zymfentra,’ Celltrion’s subcutaneous infliximab therapy currently marketed as a new drug in the U.S., will also see no tariff impact, as its drug substance (DS) will be produced at the Branchburg plant in New Jersey. Celltrion has already completed the technology transfer for Zymfentra production at this facility and plans to expand local production to include not only Zymfentra but all products to be sold in the U.S. in the future.

Celltrion explained that by establishing a local production system that fundamentally avoids U.S. tariff risks, the company will be structurally exempt from related impacts even if U.S. tariff policies, such as tariff rate adjustments, are revised in the future.

Additional Growth Expected Through Expanded CMO Business in the U.S.

Sungjin Seo, Chairman of Celltrion Group

This measure essentially requires not only finished pharmaceuticals (DP) but also active pharmaceutical ingredients to be produced in the U.S., which is expected to significantly increase the local production demand from global pharmaceutical companies. Celltrion expects its Branchburg facility to directly benefit from this trend.

Celltrion has decided to expand its Branchburg facility by an additional 75,000 liters, which will increase the total drug substance production capacity from the current 66,000 liters to 141,000 liters. This expansion not only enhances local production capabilities but also significantly strengthens Celltrion’s ability to secure global contract manufacturing (CMO) orders, further brightening the outlook for additional revenue growth through the expanded CMO business.

Direct sales competitiveness based on local production in the U.S. is also expected to improve. In particular, Zymfentra has entered a full-fledged growth trajectory, recording the highest-ever monthly prescription volume, more than tripling compared to last year. If tariff-free pricing is achieved through local manufacturing, this growth momentum is expected to accelerate even further. When combined with reduced logistics and transportation costs, Celltrion’s price competitiveness compared to peers is expected to increase even more.

A Celltrion representative stated, “With the impact of U.S. pharmaceutical tariffs on our major product portfolio effectively resolved, the strengthening of direct sales competitiveness through local production and the expansion of new business opportunities are positive outcomes. We plan to further accelerate our growth in the U.S. market through increased prescriptions of major products, including Zymfentra, and expansion of our CMO business.”

This content was produced with the assistance of AI translation services.