Celltrion acquires Eli Lilly's U.S. plant for $460M

"We have resolved U.S. tariff risks…through the CMO contract, we have secured sales immediately"

Celltrion has signed an agreement with Eli Lilly and Company (United States) for the acquisition of a biopharmaceutical manufacturing plant in Branchburg, New Jersey, for approximately $460 million.

 

According to the Financial Supervisory Service, on September 23, Celltrion plans to make a total investment of KRW 700 billion, covering costs such as the factory acquisition price and initial operational expenses.

 

The company plans to pursue facility expansion on the plant's idle land, which would require at least an additional investment of over KRW 700 billion.

 

The total investment for the acquisition and expansion will be at least KRW 1.4 trillion.

 

The company explained that the acquiring entity is the U.S.

 

subsidiary, considering its local operations and strategic geographic location.

 

Both companies will cooperate to finalize the factory acquisition procedures by the end of the year.

 

The plant to be acquired is a large-scale campus spanning approximately 150,000 square meters, comprising four buildings: a manufacturing facility, a warehouse, and technical and operational support buildings.

 

The facility is a fully operational, cGMP-compliant drug substance (DS) production plant that can be operated immediately upon acquisition.

 

This will significantly shorten the time to production and reduce costs compared to building a new plant, which would take more than five years and cost over a trillion KRW.

 

The plant also has approximately 36,000 square meters of idle land for capacity expansion, allowing the company to respond to future market demand.

 

Celltrion plans to quickly begin expanding its facilities for the production of key products on the secured, idle land.

 

Once the expansion is complete, the company anticipates having a production capacity that is 1.5 times that of its Plant 2 in Songdo, Incheon.

 

Celltrion stated that this acquisition agreement completes its comprehensive plan to address U.S.

 

tariff risks.

 

"We have already taken short- to medium-term measures to counter tariffs, such as relocating two years' worth of inventory to the U.S.

 

and expanding contracts with local Contract Manufacturing Organizations (CMOs)," a Celltrion official said.

 

"With the addition of a fundamental solution, securing a local production plant, Celltrion is now poised to be free from all potential tariff risks in the future." The company explained that once the facility changes and expansions are realized, its flagship products supplied in the U.S., as well as future products, will be exempt from tariff impacts early on.

 

Notably, the agreement also includes the complete employment transfer of local personnel with expertise and experience in plant operations.

 

This agreement will enable the company to maintain seamless plant operation, ensuring the continuation of operational stability and productivity.

 

A company official said, "Constructing a new plant requires a massive investment and several years just to prepare for initial operations and secure and train personnel.

 

In contrast, by acquiring an existing cGMP-compliant plant with a skilled local workforce, Celltrion can significantly reduce this burden," and added, "During future expansion, we will also be able to actively utilize the talent infrastructure of New Jersey, which has a large pool of pharmaceutical and biotech professionals." The official continued, "By signing a CMO contract with Lilly at the same time, we have not only secured a local production base in the U.S.

 

but also a powerful growth engine," and added, "Under the agreement, Celltrion will steadily supply drug substance produced at the plant to Lilly, which will enable us to expand our revenue and recover our investment early."