The Celltrion Group announced the launch of the integrated entity of Celltrion and Celltrion Healthcare, in which Celltrion will be absorbing Celltrion Healthcare to form a single entity, on Thursday.
The scheduled date for the listing of new shares resulting from this merger is Jan. 12, 2024, and securities analysts predict that the post-merger market capitalization is predicted to be around 40 trillion won ($31 billion), which would place it within the top 10 in terms of market capitalization in the KOSPI market.
The group has stressed that the purpose of an integrated Celltrion is to centralize the currently bifurcated development, production, distribution, and sales operations.
According to Celltrion, the merger brings three main benefits -- securing large-scale investment funds based on high profitability, coming up with a more aggressive pricing strategy based on cost competitiveness to expand market share and sales regions, and simplifying transaction structure which will clarify financial metrics, such as profit, enhanced transparency and investor trust.
Celltrion officials said they expect that the integrated Celltrion will maximize the synergies of the two entities by enhancing the competitiveness of its mainstay biosimilars and boosting its capabilities in new drug development, establishing itself as a comprehensive healthcare company.
The merger also significantly restructures Celltrion's governance. Previously, Celltrion Holdings, under Chairman Seo Jung-jin, separately controlled Celltrion and Celltrion Healthcare.
After the merger, Celltrion Holdings will become the largest shareholder of integrated Celltrion, holding 21.5 percent of its shares. Celltrion Pharm, previously a subsidiary of Celltrion, will become a subsidiary of the integrated entity.
"Integrated Celltrion will strive to become a multinational pharmaceutical company that can compete with globally renowned pharmaceutical companies based on its differentiated competitiveness," a Celltrion official said.
The integrated entity is the first phase of the merger among Celltrion Group's affiliates, marking the first step toward becoming a big global pharma company with an annual revenue of 12 trillion won by 2030, the official added.
Next year, Celltrion plans to complete the second phase of integration by merging with Celltrion Pharm.
The company's shares rose on Thursday, driven by expectations surrounding the integrated Celltrion. As of the market close, the company’s shares stood at 201,500 won, up 6.16 percent from the previous trading day.
Meanwhile, Celltrion Group plans to unveil its detailed management strategy for the merged entity at the J.P. Morgan Healthcare Conference (JPMHC) in San Francisco, Calif., next month. Chairman Seo will present the post-merger blueprint to global investors.
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