2023-10-29 21:12:05
Celltrion faces a double crisis… Seo Jeong-jin “We will keep our promise to achieve 3.5 trillion won in overseas sales by 2024.”
Celltrion Group Chairman Seo Jeong-jin (66, photo) emphasized this at the interim general shareholders meeting of Celltrion (KS:) held in Songdo, Incheon on the 23rd. It was a meeting to seek shareholders’ consent regarding the merger of Celltrion and Celltrion Healthcare. Chairman Seo said, “I met with institutional investors in Singapore and the United States in August and September and received confirmation that the merger was justified and that they would support it,” and added, “(Even after the merger), the company’s sales, pipeline, and growth potential will remain unchanged. This merger will affect shareholders.” “We will finish it so that it can be a festival for everyone,” he said.
Celltrion faced a double blessing on this day. These are mergers and global new drug approvals. First, shareholders approved the Celltrion Group merger. The approval ratio of shareholders attending the extraordinary general meeting was 97.04% for Celltrion and 95.17% for Celltrion Healthcare (KQ:). This merger, in which Celltrion absorbs Celltrion Healthcare, grants 0.4492620 shares of Celltrion common stock for each share of Celltrion Healthcare common stock. The merger price is 148,853 won for Celltrion and 66,874 won for Celltrion Healthcare. The merger date is December 28th, and the new stock listing date is January 12th, 2024.
For the first time since its founding, it passed the U.S. Food and Drug Administration (FDA) with a new drug. Zymfentra, which has been approved by the FDA, is an infliximab SC formulation treatment developed by changing the existing intravenous formulation, Remsima, to a subcutaneous injection formulation to secure competitiveness in the TNF-α inhibitor market. The FDA recognized the differentiation of Zympentra from the approval consultation stage and recommended a new drug approval process. To obtain approval as a new drug, Celltrion conducted two new global phase 3 clinical trials and proved its safety and effectiveness.
Zimpentra is the key to achieving 3.5 trillion won in sales next year, which Chairman Seo promised to shareholders. According to IQVIA, a pharmaceutical market research firm, the size of the U.S. TNF-α inhibitor market, including infliximab, was $47.736 billion (KRW 62.057 trillion) as of last year. Among them, the inflammatory bowel disease (IBD) market that Zimpentra primarily targets is worth about $9.827 billion (12.8 trillion won). Including all IBD patients receiving treatments other than TNF-α inhibitors, the total IBD target market in the United States amounts to approximately $21.8 billion (approximately 28.3 trillion won).
Celltrion Group aims to achieve annual sales of more than KRW 600 billion after the launch of Zympentra in the U.S., and sales of KRW 3 trillion within three years. This is confidence that it can quickly encroach on the market. Considering that the securities industry’s expected sales of Celltrion this year is 2.4061 trillion won, it is predicted that more than 30% of Celltrion’s sales next year will come from Zimpentra.
There are also variables to this merger. Existing shareholders who oppose the merger can sell their shares to each company by exercising their right to purchase shares by the 13th of next month if they do not want the merger or conversion to new shares. As the National Pension Service, the second largest shareholder, expressed a neutral opinion on the merger, concerns about stock purchase rights also increased.
Celltrion has secured approximately 1 trillion won in funds to prepare for stock purchase rights. The industry agrees that there are no problems with the merger as the merger plan was approved as scheduled and Celltrion recently borrowed 550 billion won from banks. Chairman Seo also said, “There are concerns that we may be held back by stock purchase rights, but we will push forward even if it means incurring debt.”
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