Celltrion Group Chairman Jung-jin Seo announced during a Hong Kong investor conference on November 27th that the company plans to establish a wholly owned subsidiary for contract development and manufacturing organization (CDMO) operations in 2024. Construction of a CDMO production facility is scheduled to begin by 2025. Additionally, Celltrion aims to bolster its workforce to open research centers in Korea, the U.S., and Europe, with plans to establish a research hub in India to address the demand for over 500 PhD-level professionals.

At the conference, Celltrion detailed its biosimilar strategy, revenue projections, drug development pipeline, and entry into the CDMO sector.

Chairman Seo noted, “We announced plans to enter the CDMO business at the Morgan Stanley Global Healthcare Conference last September, and this decision was internally finalized in 2023.” He emphasized that the CDMO initiative will operate under a fully owned subsidiary, with production facilities playing a central role.

The company plans an initial investment of at least $1.1 billion for the CDMO business. “We will start with internal funds. With a 10,000-liter production capacity, we expect to generate $71 million in annual revenue starting in 2028,” Seo stated.

Chairman Seo further elaborated on Celltrion’s focus on contract research, development, and manufacturing (CRDMO), which he described as offering broader services compared to competitors. Highlighting the company’s unique capabilities, Seo cited its proprietary messenger RNA (mRNA) platform and microbiome technology.

Seo also revealed plans to construct a 200,000-liter production facility in Korea and mentioned the possibility of building additional facilities in other countries if needed. Additionally, Celltrion plans to enter the cell and gene therapy (CGT) CDMO market in the future.

On financial performance, Seo forecasted $2.5 billion in annual revenue for 2024, targeting $3.5 billion for 2025. Key contributors include $516 million from Remsima SC and over $495 million from its U.S. counterpart, Zymfentra.

“If we achieve $3.5 billion in revenue by 2025, we expect to reach $5-5.7 billion in 2026 and $7.1 billion by 2027,” Seo added, emphasizing Celltrion’s transformation into a performance-driven company.

Concluding his remarks, Seo stated, “Since Celltrion’s founding, I have never sold a single share of company stock. To enhance shareholder value, we plan to maximize cash dividends.” He outlined a strategy to allocate 40% of EBITDA for product development, 30% for cash dividends, and retain the remaining 30% as cash reserves.