Celltrion anticipates Trump admin will bring positive shift

"US export increases" expected

Changes such as a policy promoting generic and biosimilar uses are anticipated

The 'Biosecure Act' will drive Celltrion's CDMO business, its future growth momentum

Celltrion "An opportunity to focus mainly on business aspects, marketing expansion and sales growth"

Celltrion anticipates that President-elect Donald Trump's second administration in the United States will positively affect the company's biosimilars and Contract Development and Management Operations (CDMO) services.

 

On November 12, Celltrion presented stockholders with the potential impact on the business under the title 'The Business Impact and Outlook upon President-elect Donald Trump's second administration in the United States launches.' Celltrion cited a report from the Korea Institute for Industrial Economics and Trade, 'The potential impacts of the U.S.

 

presidential election on Korean industry and outlook,' and analyzed that the Trump administration will be friendly towards using generics and biosimilars.

 

Currently, healthcare expenditures in the United States accounted for 17.6% of the country's GDP in 2023.

 

As a solution, Trump's first administration implemented initiatives such as the 'Lowering Drug Prices by Putting America First' administrative orders and the 'American Patients First' plan to lower drug prices.

 

These policies include details regarding biosimilars, including 'Improve Competition' and 'Lowering List Prices.' "When President-elect Trump's second administration launches, the administration is expected to take over the policy during the first administration and pursue healthcare policy," Celltrion said.

 

"We expect the administration will favor expanding biosimilar prescriptions, which is Celltrion's main business." Trump's first administration pursued a policy of regulating drug pricing, proposing a bill to Congress to stop pharmaceutical companies from paying rebates to the top 3 pharmacy benefit managers (PBMs) in the United States.

 

Such a move was said to be friendly to the biosimilar market.

 

Additionally, as the administration pursues the PVM reform to alleviate financial loss, a by-product of economic stimulation, by reducing taxes, implementing a policy that expands the use of biosimilars is expected.

 

Such a move is expected to be favorable to Celltrion.

 

In particular, Celltrion anticipated these policies would positively impact its CDMO service, which will be Celltrion's growth momentum.

 

The 'Biosecure Act' bill, the U.S.

 

Congress initiative, 'prohibits entities that receive federal funds from using biotechnology from a biotechnology company of concern may not contract with any entities that do so.' The Biosecure Act is expected to support establishing a new supply network in US-friendly countries with business competitiveness, including South Korea, Japan, and India.

 

"In line with the U.S.

 

industry trend, we will complete establishing the CDMO corporate entity within this year to seize the opportunity to secure demands from Chinese companies," Celltrion added.

 

"Celltrion will secure a new manufacturing plant, as Celltrion's 100% owned subsidiary, in South Korea or overseas to expand production capacity." Additionally, as Trump's second administration's policy priority is the 'America First' agenda, Celltrion anticipates US dollar strength will likely result in trade disputes and interest rate rises.

 

During the process, Celltrion anticipates its products will remain unaffected by tariff increases, as tariffs on drugs are exempt under the WTO's Pharma Agreement.

 

"Upon Trump's second administration launches, we expect the company will have an opportunity to focus mainly on business aspects, marketing expansion and sales growth, compared to other type of business," Celltrion said.

 

"Celltrion will focus on changes to the U.S.

 

biopharmaceutical industry and generate outcomes by maximizing business opportunity," Celltrion emphasized.