Celltrion reported its highest-ever performance last year, and the company’s stock reached a three-year high on February 11th, signaling a potential turning point for the South Korean pharmaceutical giant. This year, Celltrion anticipates another record-breaking performance driven by increased sales of higher-margin products and the benefits of its newly acquired U.S. production facility.
Analysts Re-Evaluate Celltrion’s Value
Investment firms are upgrading Celltrion’s outlook, citing previously undervalued potential.
According to industry sources on February 12th, major global investment banks and domestic securities firms have recently been revising Celltrion’s target stock price upward. The primary reason for this adjustment is the growing consensus that the company’s corporate value has been underestimated for an extended period and warrants reevaluation.
Last year, Celltrion surpassed 4 trillion won in annual sales and exceeded 1 trillion won in operating profit—a new record. This success was fueled by consistent prescription rates for established products like ‘Remsima,’ which has generated over 1 trillion won in annual sales for two consecutive years, coupled with the introduction of more profitable follow-up products in key markets. This year, a significant expansion of prescriptions for next-generation products, including ‘Stechima,’ ‘Aptozma,’ and ‘Stoboclo-Osenvelt,’ spearheaded by ‘Remsima SC’—aiming to become Korea’s second blockbuster drug—is projected to drive sales growth beyond 5 trillion won. Consequently, Celltrion’s stock price reached its highest intraday level in three years, hitting 243,500 won on February 11th.
Overcoming Past Challenges
In recent years, Celltrion’s corporate value has been impacted by the aftermath of the COVID-19 pandemic. While expectations soared during the pandemic for ‘Rekirona,’ its COVID-19 treatment, the drug’s development success didn’t translate into substantial commercial results, creating a drag on the company’s performance. Analysts believe this led to an undervaluation despite Celltrion’s consistent performance and ongoing structural reforms.
However, the situation is changing. Factors such as the resolution of copyright amortization related to the Celltrion Healthcare merger, and notably, the high profitability of its “second product lines,” are expected to contribute significantly to performance this year.
Kim Min-jeong, a researcher at DS Securities, significantly increased Celltrion’s target stock price from 240,000 won to 320,000 won on February 12th, stating, “We anticipate continued explosive growth this year, with sales and operating profit increasing by more than 30% and 50% compared to the previous year.” She added, “This year marks the beginning of substantial growth in second biosimilar sales, and the launches of Omniqlo (USA), Aptozma (Europe), and Uplyma (Japan) will accelerate performance growth.”
Meritz Securities believes the approaching patent cliff for major global pharmaceutical companies will further drive the launch of new Celltrion biosimilars. They also raised the target stock price to 280,000 won, emphasizing the need to recognize the company’s continued growth as it evolves into a comprehensive pharmaceutical company through its own research and development and open innovation strategies.
U.S. Expansion and Future Growth
Expectations surrounding Celltrion’s newly acquired U.S. production facility are also contributing to the reevaluation. Celltrion completed the acquisition of Eli Lilly’s production facility in Branchburg, New Jersey, USA, at the end of last year. This acquisition not only secures contract manufacturing (CMO) volumes from Lilly but also eliminates the uncertainties associated with U.S. tariffs by establishing a local production base.
Shinhan Investment & Securities researchers Ho-cheol Lee and Min-yong Eom recently raised their target stock price for Celltrion from 230,000 won to 290,000 won, noting, “This year will be the first to see significant consignment manufacturing (CMO) sales for Eli Lilly, a major global pharma.” They further added, “It is noteworthy that long-term momentum is also being built by developing new drugs such as promising modalities (ADC, bispecific antibodies) utilizing abundant cash flow.”
The positive reassessment of Celltrion’s corporate value is extending beyond Korea to major global investment banks. Expectations for increased corporate value are reflected not only in higher target prices but also in a shift from conservative to more optimistic investment opinions.
Morgan Stanley recently raised Celltrion’s target stock price from 202,000 won to 275,000 won and adjusted its investment opinion from ‘neutral’ to ‘buy.’ The firm noted that new biosimilars offer higher margins than existing products due to the absence of years of price erosion, and the market is currently underestimating the potential of the “second wave” of biosimilars. They analyzed that new biosimilar products will contribute significantly to Celltrion’s sales this year.
UBS raised the target stock price to 260,000 won, a 6% increase, while maintaining a buy opinion. UBS predicted that Celltrion remains ‘underappreciated’ by the market and is entering a reevaluation phase considering its margins, contract development and manufacturing (CDMO) capabilities, and realistic growth guidance. While the company has faced challenges in achieving some ambitious goals, its growth engine remains strong.
A Celltrion official stated, “In addition to the stable sales of our existing flagship biosimilar products, we achieved our highest-ever performance last year as high-margin new products successfully gained traction in the market. This year, with the anticipated full-scale expansion of follow-up products, including Remsima SC, which aims to become a global blockbuster treatment, we will dedicate ourselves company-wide to continuing to achieve record-breaking performance.”
