Pharma companies accelerate investment in future growth

Celltrion invests KRW 1.2265 trillion and Chong Kun Dang KRW 392.5 billion in production and research facilities

Improved cash generation supports based on solid performance... securing future demand by expanding production capacity

Major Korean pharmaceutical and biotechnology companies are moving to expand production and research facilities. Their investments range from trillion-won biologics manufacturing plants to large-scale research complexes. The strategy is to use accumulated cash-generation capacity and financial headroom to expand production and prepare proactively for future demand.

According to the Financial Supervisory Service on the 28th, GC Biopharma recently decided to invest KRW 140 billion in a new production line at its Ochang plant in North Chungcheong Province. The investment is equivalent to 10% of the company’s consolidated equity as of the end of last year and will run through the end of 2030.

The project is intended to establish a production base for a subcutaneous formulation of the immunoglobulin therapy Alyglo. Alyglo is a plasma-derived product manufactured by isolating and purifying immunoglobulin from blood plasma and is used to treat primary immunodeficiency diseases, including congenital immunodeficiency. GC Biopharma is developing a subcutaneous version of Alyglo, which is currently administered intravenously, to improve convenience for patients. The company aims to submit a Phase III clinical trial application to the US Food and Drug Administration next year. The new line is intended to secure production capacity in advance of commercialization and anticipated growth of US demand.

Ahn-Gook Pharm held a board meeting on the 14th and approved a KRW 48.5 billion investment to expand its Hyangnam plant in Hwaseong, Gyeonggi Province. The amount is equivalent to 29% of consolidated equity as of the end of last year.

The investment will be made in the plant located in the pharmaceutical industrial complex in Hyangnam-eup, Hwaseong. Construction began that day and is scheduled for completion by the end of December next year. The company said the expansion is being made to increase production capacity.

Chong Kun Dang will build a biopharmaceutical research complex in the Baegot district of Siheung, Gyeonggi Province. The facility investment totals KRW 392.5 billion, equivalent to 39% of consolidated equity as of the end of last year. The company will continue investment through the end of August 2028.

The project covers a 79,790.8㎡ site near 302 Baegot-dong, Siheung. Chong Kun Dang previously acquired the site for KRW 94.9 billion in June last year. The company plans to create an integrated research complex comprising biopharmaceutical research facilities, a research support center and R&D validation facilities.

The new complex will conduct research and development of next-generation therapies, including cell and gene therapies, antibody-drug conjugates, recombinant proteins and bispecific antibodies. Chong Kun Dang also plans to establish an AI-enabled drug discovery platform and develop the site into an R&D hub linking candidate discovery, research, development and validation in one location. Collaboration is also expected with the nearby Seoul National University Hospital in Siheung Baegot, as well as companies and research institutes.

These are not the only companies undertaking large-scale facility investments. Pharmaceutical and biotechnology companies have announced a series of investments in production and research facilities this year.

HK inno.N will invest KRW 97 billion to build a new solid oral dosage manufacturing facility with a total floor area of 12,561.98㎡ on the remaining land at its Osong plant in North Chungcheong Province. The investment will continue through the end of January 2028. The company plans to secure medium- and long-term growth engines and strengthen competitiveness by expanding production capacity.

Celltrion will invest KRW 1.2265 trillion to build its fourth and fifth plants at its Songdo campus in Incheon. It plans to apply automation systems and smart factory technologies to the new facilities to improve production efficiency and process flexibility. The plants will be designed to accommodate production ranging from small-volume, multi-product manufacturing to large-scale commercial output. They will be used not only for established flagship products but also for follow-on biosimilars and new drug pipelines.

Celltrion is also expanding both drug substance (DS) and drug product (DP) manufacturing capacity in the US and Korea. At its DS plant in Branchburg, New Jersey, the company has increased the scale of the planned expansion to add 75,000 liters of capacity. Once completed, capacity will rise from 66,000 liters to over 141,000 liters. When the fourth and fifth Songdo plants are also completed, Celltrion’s total DS production capacity will increase from 316,000 liters to 571,000 liters.

In the DP segment, a new plant at the Songdo campus is scheduled for completion this year. The facility will be able to produce 6.5 million liquid vials annually. Combined with the existing production line at Plant 2, annual capacity in Songdo will rise to 10.5 million vials. Celltrion has also selected a site for a new DP plant in the Yesan Industrial Complex in South Chungcheong Province and plans to begin design work this year. The group expects to be able to manufacture approximately 90% of global DP demand in-house once Celltrion Pharm completes the expansion of its prefilled syringe production facilities.

BTGEN, formerly STgen Bio and a subsidiary of Dong-A Socio Holdings, will also invest KRW 109 billion to expand its biologics manufacturing facilities. The investment includes the expansion of buildings and production equipment and will continue through the end of March 2028. BTGEN plans to increase its biologics manufacturing capacity through the project.

Industry observers attribute this acceleration in future investment to the back of strong earnings made by Korean pharmaceutical and biotechnology companies.

Celltrion posted consolidated revenue of KRW 1.3937 trillion and operating profit of KRW 451.8 billion in Q2, up 45% and 86%, respectively, year over year. In addition to solid sales of existing flagship products, increased revenue from higher-margin new biosimilars such as Remsima SC and Yuflyma drove the company’s earnings growth.

Profitability also improved significantly as the rising contribution of new products coincided with the depletion of high-cost inventory and better production yields. 1H operating profit rose 97% year over year to KRW 773.7 billion, while the operating margin increased by 9 percentage points to 31% from 22% a year earlier.

HK inno.N is also maintaining earnings growth on the back of strong prescription drug sales. Q1 revenue rose 5% year over year to KRW 258.7 billion, while operating profit increased 31% to KRW 33.2 billion. The improvement was driven by broad growth across its prescription drug business, including IV solutions, cardiovascular drugs and oncology products. Q1 IV solution sales rose 11% year over year to KRW 37.1 billion, while cardiovascular sales increased 10% to KRW 73 billion. Oncology sales climbed 34% to KRW 29.2 billion with the addition of the in-licensed drug Avastin.

Ahn-Gook Pharm also expanded its investment capacity on the back of improved earnings. Consolidated Q1 revenue increased 31% year over year to KRW 98.9 billion, while operating profit surged 174% to KRW 16 billion. Its operating margin stood at 16.2%. The company’s earnings improvement was driven by simultaneous growth in its flagship prescription drug and health and beauty businesses.

Chong Kun Dang’s consolidated Q1 revenue increased 12% year over year to KRW 447.8 billion, while operating profit rose 13% to KRW 14.1 billion. GC Biopharma’s consolidated Q1 revenue increased 14% to KRW 435.5 billion, while operating profit rose 47% to KRW 11.7 billion.

BTGEN is also among the companies that have posted rapid earnings growth. Its revenue increased 76% year over year to KRW 103.7 billion last year, while operating profit surged 318% to KRW 7.1 billion. Basically, the company’s revenue nearly doubled and operating profit more than quadrupled in one year. Increased global commercial production of the Stelara biosimilar Imuldosa and higher exports of an anemia treatment biosimilar drove the company’s growth. However, in Q2 this year, revenue fell 45% year over year to KRW 13.7 billion and operating profit declined 90% to KRW 400 million, with orders from major customers concentrated in 2H.

The sector is regarded as establishing a virtuous cycle in which funds generated through stronger earnings are being reinvested in production and research facilities. The companies aim to use expanded capacity to meet future demand for biologics and prescription drugs and convert that demand into further revenue and profit growth. Expectations are growing that their large-scale expansion projects will help them capture future demand and further strengthen their medium- and long-term growth foundations.