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| Celltrion CEO Gi Wo-seong, left, signs a contract with Chen Ping, director of the administrative committee of the East Lake High-Tech Development Zone (Optics Valley of China), after the South Korean biosimilar manufacturer agreed with Hubei regional government to build a pharmaceutical plant in the regional city, Wuhan, China, Tuesday. Yonhap |
By Kim Yoo-chul
South Korea's leading biosimilar manufacturer Celltrion said Tuesday it has signed with a regional government in China to build a plant with a 120,000 liter production capacity in a bid to cash in on the growing pharmaceuticals market.
In a statement, Celltrion said it has signed a contract with Hubei provincial government, central China. The agreement is calling for the South Korean manufacturer to build a new manufacturing facility with the Chinese regional government providing it with various tax benefits and administrative support.
"Given the adequate infrastructure for development and growth of bio processing industries and as Wuhan, the city inside the Hubei Province is the home to more than 200 bio and pharmaceutical companies, Celltrion decided the Chinese city is the right fit for progress in our business," the statement said.
China is considered the world's second-largest biopharmaceutical market. Once the plant is completed, will be the largest pharmaceuticals production facility there and Celltrion plans to invest some 600 billion won ($520 million) in the new construction project over the next five years.
Regarding the specifics of its updated business strategies in China, the South Korean manufacturer said it was also planning to launch a contract manufacturing organization (CMO) business, in addition to the supplement of biopharmaceutical products.
"Celltrion also plans to create direct sales channels. We will use our internal cash-reserves for the new plant. If necessary, Celltrion will receive funding from investors. A ground-breaking ceremony has been set for some time within the first half of this year," the statement added.
"There is huge demand for high quality medicine and medical supplies in China," Celltrion CEO Gi Woo-seong was quoted as saying in the company release.
The investment plan came after drug pricing had been a "key topic" at the recent healthcare conference organized by J.P. Morgan in San Francisco in the United States.
At the conference, all major drug firms launched their core priority on making drugs more affordable for patients. The Chinese government plans to encourage industry leaders to provide cheaper drugs in an attempt to improve accessibility to patients. Celltrion, along with its biggest local rival Samsung BioLogics, appears to be setting up internal price controls as a strategy to maintain advantage.
The total monetary value of the drug market in China is estimated at some 150 trillion won as of the end of 2018, according to market research firms. China has recently been more aggressive in inviting foreign biosimilar companies to expand operations to mainland China.
