Celltrion announced on the 23rd that it has signed an acquisition agreement with global big pharma Eli Lilly for a biopharmaceutical production plant located in Branchburg, New Jersey, USA, valued at approximately KRW 460 billion. This agreement concludes the comprehensive plan for responding to U.S. tariffs announced by Suh Jeong-jin, Chairman of Celltrion Group.

On this day, Chairman Suh held an online press conference regarding the U.S. plant acquisition agreement. The press conference was urgently decided to comply with disclosure regulations and avoid the offensive from short-selling forces. Chairman Suh stated, "With the acquisition of local production facilities, Celltrion is expected to be free from future U.S. tariff issues," and added, "It is anticipated that production of our own items will be possible from the end of 2026 after going through the necessary procedures."

Celltrion plans to invest a total of KRW 700 billion, including the acquisition cost of the plant and initial operating expenses. It also plans to expand production facilities on the idle land within the acquired plant, with an additional investment of at least KRW 700 billion. A total investment of over KRW 1.4 trillion is expected for the plant acquisition and expansion. The acquisition entity for this contract is Celltrion's U.S. subsidiary. Considering local operational efficiency and geographical factors, Celltrion's U.S. subsidiary will lead the contract. The goal is to complete the plant acquisition process by the end of the year.

The plant to be acquired is equipped with a total of four buildings, including production facilities, a logistics warehouse, a technical support building, and an operations building on a site of approximately 45,000 pyeong. There is also about 11,000 pyeong of idle land available for capacity expansion, allowing proactive response to future market demand increases.
Celltrion emphasized that the main contract agreement completes the comprehensive plan for responding to tariff risks presented by Chairman Suh in a press conference last May. In addition to mid-to-long-term strategies such as preemptively transferring two years' worth of inventory to the U.S. and expanding local CMO contracts, the acquisition of local production plants provides a fundamental solution. Once facility modifications and expansions are realized, not only the main products supplied by Celltrion in the U.S. but also future products will be free from tariff impacts.

The plant Celltrion is acquiring is a cGMP facility for producing biopharmaceutical drug substances (DS) and can be operated immediately upon acquisition. This is why acquisition was pursued instead of constructing a new plant, which would take over five years and cost in the trillions. Celltrion explained that the acquisition was pursued to significantly advance the production facilities for its main products and reduce costs. The production of Celltrion's main products is expected to begin by the end of 2026.

The idle land within the plant will be used for facility expansion, with plans for an additional investment of over KRW 700 billion. Once the expansion is completed, Celltrion reported that the Lilly plant will have a production capacity 1.5 times that of Celltrion's Songdo Plant 2.
Celltrion will fully succeed the employment of existing Lilly plant personnel, intending to maximize their operational experience and expertise. Celltrion expects to maintain operational stability and productivity by operating the plant without a manpower gap.

Regarding local workforce operations, acquisition is considered more advantageous than new plant construction. A new plant requires astronomical costs and time for initial operation preparation, workforce acquisition, and training, but Celltrion can reduce these burdens by absorbing an operational cGMP plant and skilled current personnel. During expansion, Celltrion plans to actively utilize the broad pharmaceutical and biotech talent pool in New Jersey.

Regarding the emphasis by U.S. President Trump on local employee education and training, Chairman Suh stated, "During the plant inspection, there were aspects where the employees were even better than Celltrion's," and added, "We will have time for mutual exchange, learn from each other, and invite U.S. personnel to Korea to expand cooperation." He further explained, "Both Celltrion employees and the plant employees are experts, so no special training courses seem necessary."

Along with acquiring the Lilly plant, Celltrion concurrently signed a CMO contract with Lilly. This not only establishes a local production base in the U.S. but also secures new growth engines. According to the contract, Celltrion will continue to supply the drug substances produced at the plant to Lilly. This is expected to positively impact related sales expansion and early recovery of the investment.

Additionally, by establishing a base in the U.S., Celltrion can set up a one-stop supply chain covering the entire product production cycle, from biopharmaceutical production to sales, in the world's largest market. Furthermore, local product production is expected to significantly reduce various costs such as logistics fees for U.S.-bound products and outsourcing CMO, thereby enhancing the price competitiveness of Celltrion's main products. Celltrion plans to continue close cooperation with Lilly for a smooth business transition until the acquired plant establishes a new operational system.

Edgardo Hernandez, Executive Vice President and President of Manufacturing Operations at Eli Lilly, stated, "The Branchburg plant, which has been one of Lilly's production bases for the past 17 years, has proven the expertise, responsibility, and dedication of the local team while safely producing high-quality medicines," and expressed deep gratitude for the dedication and contribution to the company's mission shown by the employees at Lilly's Branchburg site over the years.

Suh Jeong-jin, Chairman of Celltrion Group, stated, "This plant acquisition fundamentally resolves the U.S. tariff risk," and added, "We anticipate that preemptive investment in tariffs, like the U.S. plant acquisition, will bring new business opportunities and lead to new value creation and sales expansion." He also emphasized, "The matters to consider after the merger concluded in the third quarter, and from the fourth quarter, we will return to the existing business structure," and added, "We expect this year's business plan to grow without major variables or uncertainties."

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