[Company analysis] Celltrion Inc. (셀트리온)

「Celltrion Inc. (셀트리온)」is a comprehensive biotechnology company that mainly deals with biopharmaceuticals, and has a world-class biosimilar product development technology. In terms of market capitalization, it is ranked 6th in South Korea based on June 1, 2020. As for the production capacity, this company has the largest production facility for animal cell culture protein drugs in Asia. They are cooperating with「Nippon Kayaku(日本化薬)」in the development of biosimilar products in Japan. In addition,「Celltrion Healthcare (셀트리온 헬스케어)」is in charge of exporting Celltrion biosimilar products to the global market. The number of connected employees is approximately 2,111.

 

1. Company Profile

2. Summary and Features

3. Major Business

4. Financial Information

 

 

 

1. Company Profile

 

※Unit is KRW 10 million, as of 2019

Company name	Celltrion Inc.
Company name (Korean)	셀트리온
Date of establishment	Tuesday, February 26, 2002
Headquarters location	인천광역시 연수구 아카데미로 23
Capital	11,660
Consolidated sales	112,845
Consolidated operating profit	37,805
Consolidated total assets	389,369
Consolidated capital	290,695
Capital adequacy ratio	74.7%
Consolidated number of employees	2,111

 

 

 

2. Summary and Features

 
Established in 2002, 「Celltrion」is a biotechnology company that develops and produces various protein therapeutics and anti-cancer agents based on biotechnology and large-scale culture technology for animal cells. In Asia, this company has the largest production capacity of 190,000L(1st factory: 100,000L, 2nd factory: 90,000L) for animal cell culture protein pharmaceuticals. As of June 1, 2020,「Celltrion」has 6th largest market capitalization standard in South Korea. It is also known to be the highest salary and bonus company in the Korean pharmaceutical and bio industries.

In fact, when they were established in 2002, the main focus was contract manufacturing of pharmaceuticals (CMO). However, already from this point,「Celltrion」have invested a large amount of money to build various infrastructures for the development of biosimilar products from a long-term perspective. Later, thanks to this efforts, this company could secure the world's highest level of development technology in biosimilar product development technology. "Remsima", which is the first biosimilar for the treatment of autoimmune diseases developed by 「Certrion」,  was approved by Korea in 2012, Europe in 2013, Japan and Canada in 2014, and the US FDA in 2016.

In addition to the "Remsima" above, "Truxima", a biosimilar treatment for blood cancer, was launched in July 2017, and "Herzuma", a treatment for breast cancer, was launched in September 2017. In the case of "Truxima", it replaced more than 80% of the UK's original drug market share, and in the pre-release country Germany, it replaced more than 45%. As a result, in the sales of biosimilars, "Remsima" reached 14.5 billion won sales, and "Truxima" was 5.7 billion won and "Herzuma" was 17.9 billion won in 2019.

However, the intestinal medicine "Godex" has the largest share of sales in 2019. This is a drug developed by a former 「Hanseo Pharmaceutical(한서 제약)」which has relatively small company size. At that time,「Celltrion」paid attention to the marketability of "Godex" and acquired「Hanseo Pharmaceutical」in 2009. The "Ursa" from 「Daewoong Pharmaceutical(대웅 제약)」, was a competitive product of "Godex", and it gained high recognition and popularity by TV advertising. However, its effect was debated and eventually its brand image was damaged. On the other hands, by emphasizing the few side effects of "Godex", 「Celltrion」acheived the No.1 sales in domestic intestinal medicine market.

By the way, in the cosmetics business, which this company started 2013, by utilizing technological advantages that accumulated in the biotechnology field, they are still struggling. In 2013,「Celltrion」acquired cosmetics company 「Hanskin(한스킨)」and initiated the cosmetics business under the name「Celltrion Skincure(셀트리온 스킨케어)」. But from 2013 to 2019, this business was in the red. Already,「Celltrion」started downsizing of the business by decreasing the number of employees.

 

 

 

3. Major Business

 

■ Pharmaceutical manufacturing and sales
In the case of biopharmaceuticals handled by「Celltrion」, unlike chemically-synthesized drugs that can be easily made if you know the chemical formula of the original drug, it is required to use living protein cells to produce. so copying is extremely difficult. In addition, its manufacturing process is very complicated, and manufacturing unit price is high. Only a small number of products compete in the market because of its entry barrier, so the unit price of the drug is relatively high.

 

 

 

4. Financial information

 

※Unit is KRW 10 million

		2017	2018	2019
Consolidated sales		94,907	98,207	112,845
Consolidated operating profits		50,782	33,869	37,805
Consolidated total assets		331,552	354,062	389,369
Consolidated net assets		243,192	263,277	290,695
Breakdown of sales	"Godex" and other generic drug	82,891	86,188	98,187
		49,894	33,481	35,978
	Korea domestic sales of "Remsima", "Truxima", "Herzuma" and other drug	12,952	13,947	17,268
		738	231	1,532
	Others	8,838,	770	427
		-63	-175	-111
	Adjustments	-1,820	-2,698	-3,036