Celltrion reports strong progress in Zymfentra launch and outlines future growth strategies

Celltrion has released an update on its business operations and future outlook to its shareholders on Friday.

The announcement outlined the launch of Zymfentra in the U.S. market, improvements in profitability, and expansion into the CDMO (contract development and manufacturing organization) sector.

According to the company, since its official launch in the first quarter of 2024, Zymfentra has made significant strides in the U.S. market.

“The drug has already secured coverage from 80 percent of pharmacy benefit managers (PBMs) and while the company faced a two-three month delay in actual prescriptions due to additional insurance company listings, Zymfentra's prescription rates are climbing rapidly,” the company said.

The company has also initiated online and TV advertising campaigns for Zymfentra in October.

Celltrion stressed that it is confident in achieving annual sales of 1 trillion won ($728.7 million) for Zymfentra by 2025, with the company aiming for total sales of 5 trillion won in 2025.

Celltrion addressed concerns about its profitability, explaining that the merger with Celltrion Healthcare in December 2023 led to a temporary increase in the cost of sales due to inherited high-cost inventory.

However, the company assures that this is a transient issue, with cost ratios expected to normalize throughout 2024.

“The improvement in cost ratios is attributed to the rapid depletion of high-cost inventory and the continuous production of new, lower-cost active pharmaceutical ingredients,” the company said. “This improvement is occurring naturally through stable business operations, independent of yield improvements.”

Additionally, the company expects a significant boost in operating profit margins in the second half of 2024, due to both the improving inventory cost ratios and the conclusion of major intangible asset amortization in the first half of 2024.

In the announcement, Celltrion also unveiled plans to expand into the CDMO sector, leveraging its expertise in antibody development and production. The company aims to establish a competitive edge over existing CDMO players through low expansion costs and high productivity.

To this end, the company is set to establish a new wholly-owned subsidiary focused on CDMO operations by the end of the year. Celltrion plans to begin facility expansion and full-scale business activities in this sector starting next year.