Celltrion to Build KRW 300 Billion Drug Product Plant in Yesan, South Chungcheong Province

Celltrion will build a KRW 300 billion drug product (DP) plant in Yesan County, South Chungcheong Province. The company made the plan official on the 25th through a disclosure clarifying rumors or reports (not finalized), and also disclosed that it had signed a memorandum of agreement (MOA) on investment with South Chungcheong Province, Yesan County and Chungnam Development Corporation on February 27 last year. The investment is not simply a facility expansion but part of a long-term strategy to internalize its global supply chain, and is drawing attention as a key factor that could determine cost competitiveness in the biosimilar market.

Celltrion first signed an investment memorandum of understanding (MOU) with Yesan County on November 30, 2023, to invest KRW 300 billion in a new biopharmaceutical and related auxiliary materials plant by December 2028. It subsequently signed an additional MOA in February last year, reaffirming its investment commitment. However, details such as the investment period and amount may change through consultations, and Celltrion plans to make another disclosure when specific details are finalized or by February 24 next year, within six months.

■ The key is reducing reliance on external DP processing

The drug product (DP) process involves converting drug substance (DS) into its final dosage form, and many pharmaceutical companies, including Celltrion, have so far relied substantially on contract manufacturing organizations (CMOs). Once the Yesan plant is completed, Celltrion will be able to produce approximately 90% of its global DP requirements internally, combining the facility with its DP plant in Songdo, Incheon, which is currently being expanded, and the expansion of prefilled syringe (PFS) production at its subsidiary Celltrion Pharm. This would substantially reduce the costs previously paid to external CMOs.

This could directly improve profitability in the global biosimilar market, where price competition is becoming increasingly intense. According to global market research firm Grand View Research, the global biosimilar market is expected to grow at an annual average rate of 16% to 18%, from approximately $38.7 billion to $39.6 billion in 2025 to approximately $150 billion to $185 billion around 2033 to 2035. As patent expirations for blockbuster biopharmaceuticals become concentrated and tender competition among market participants intensifies, internalized production becomes a key weapon in price competitiveness.

■ The Yesan plant as a piece of Celltrion’s global two-track strategy

Celltrion’s new Yesan plant is one pillar of a global two-track production strategy being pursued alongside the expansion of its New Jersey plant in the United States (DS production) and its Songdo campus in South Korea. Celltrion also aims to expand total DS production capacity to 571,000 liters by 2031 and achieve 100% DS internalization. In an environment of growing geopolitical trade risks, particularly tariff uncertainty, diversifying domestic production bases is also significant for securing supply flexibility for the North American and European markets.

The expansion of biotechnology infrastructure investment from the Seoul metropolitan area, concentrated in Songdo, Incheon, to the Chungcheong region is also noteworthy. South Chungcheong’s Yesan County could benefit from synergies with existing biotechnology clusters in the Chungcheong region, including Ochang, and is also expected to create advanced-industry jobs in the region.

■ Also targeting CMO business expansion

The role of the Yesan plant will not be limited to producing Celltrion’s own products. Celltrion plans to substantially expand its CMO business by using its expanded DS and DP infrastructure to manufacture products for global big pharma companies. The company envisions using the Yesan plant as a base for providing end-to-end contract manufacturing services spanning drug substance through finished drug products.

Industry observers expect Celltrion’s operating margin improvement to become visible once its DP internalization rate reaches 90%. The funds secured through this improvement could be reinvested in global launches and marketing costs for major oncology and autoimmune disease treatments, including the Keytruda biosimilar CT-P51. However, because the details of the KRW 300 billion investment have not yet been finalized, the plant’s completion schedule and the timing of securing actual production capacity will depend on the outcome of future consultations.