Celltrion Eyes Direct Global Sales To Bolster Margins, Growth
Executive Summary
Biosimilar specialist Celltrion is aiming for the next stage of growth by setting up its own global direct sales and marketing system and through a new subcutaneous formulation of infliximab, and is looking to begin discussions with existing overseas marketing partners.
Celltrion Group is seeking further growth and an improvement in profit margins through the setting up of its own direct global sales, marketing and distribution system for new products, and for its already commercialized lines if it is unable to find "win-win" strategies with existing partners for these.
Celltrion said it aims to begin with the direct handling worldwide of a new subcutaneous formulation of its biosimilar infliximab Remsima, which is undergoing regulatory review in Europe (Also see "Celltrion Plans EU Filing For Remsima SC As Phase III Completed" - Scrip, 30 Aug, 2018.). It also plans to begin talks with existing partners for its three approved biosimilar products - Remsima/Inflectra, Truxima (rituximab) and Herzuma (trastuzumab).
At present, it has more than 30 sales and marketing partners worldwide, including Pfizer Inc. and Teva Pharmaceutical Industries Ltd.
"If we cannot find a winning strategy for both sides, we will attempt direct sales and marketing of our products in certain regions without partners," Jung Jin Seo, chairman of the South Korean group, declared at a business briefing in Seoul.
Celltrion's plan comes amid increasingly fierce competition in the global biosimilars industry, where multinational pharma firms are also stepping up efforts to develop such products, or are lowering the prices of original reference drugs to better compete with biosimilars.
The group has already adjusted its own inventory levels for some partners to prepare for the new direct marketing plan. "It takes about 4-6 months to get wholesale licenses for each country. If inventory levels of our partners are too high, we have to buy them back, so we have already begun preparations last year for direct sales," said the chairman, who also noted the commission fees paid to partners.
First Global Direct Network By A Korean Pharma
Celltrion Healthcare, which conducts worldwide marketing, sales, and distribution activities for biosimilar and biological medicines developed by Celltrion, has already set up branches in about 20 countries, including in the US, Europe, Japan, Singapore and Australia, and plans to establish a presence in other countries.
If Celltrion presses ahead with its wider plans, it will be the first time for a South Korean pharma company to set up a direct sales and distribution network overseas, and the chairman said he plans to work on the ground this year to set up this infrastructure.
In addition, the group plans to diversify its production bases to improve market access and the stable supply of products. Of the 360,000 liters of new capacity it aims to build, 120,000 liters will be in South Korea and the remaining 240,000 liters overseas, although it hasn't finalized the overseas plant sites yet.
Once it establishes the direct global sales network, Celltrion will have the full range of capabilities to develop, manufacture and sell/distribute its products, taking a step closer to becoming a fully integrated global biopharma group. (Also see "Interview: Celltrion's Journey To The Top" - Scrip, 14 Jun, 2017.)
Although there could be some unexpected hiccups on the way, the group expects Celltrion Healthcare's operating profit to begin to improve from the latter half of this year as its direct network expands.
Strategic Focus On Remsima SC
In the US, the company is aiming to continue its efforts to improve physicians' views of biosimilars through real world data it has accumulated in Europe.
Celltrion stressed in particular the significance of Remsima SC, which it believes can compete with original Humira. Among TNF-alpha inhibitors, Remicade (Janssen Pharmaceutical Cos.'s original infliximab) is the only product not to have an SC as well as an IV formulation, and once Remsima SC's patents are registered, it will be under protection until 2037.
A survey of physicians conducted during United European Gastroenterology Week 2018 revealed that they preferred infliximab as the first-line treatment for inflammatory bowel disease, but actually administered SC adalimumab to some patients because of convenience. They viewed the infliximab IV and SC package as a good treatment option as patients can start their treatment with IV and once they are stabilized they can be switched to the SC formulation.
"As physicians prefer usage of IV and SC versions of the same substance we believe we can dominate this market," Hyung Ki Kim, Celltrion's vice chairman, said at the briefing.
Pipeline Progress
Otherwise, the company said it is also aiming to encourage early prescriptions of biosimilars to increase patient pools.
It is also planning to progress its other biosimilar pipeline assets such as bevacizumab (CT-P16) and adalimumab (CT-P17), with a goal to launch its biosimilar version of adalimumab higher concentration formulation in Europe in 2020 or 2021; it now has more than 20 projects in the pipeline including biosimilars.
In China, Celltrion is going through the regulatory approval process for Remsima, Truxima and Herzuma, and is talking with potential partners to set up a joint venture there.
From the editors of PharmAsia News.
(Editor's note: revised in September 2019 to correct information on the availability of SC and IV formulations of TNF alpha inhibitors besides Remicade.)