After teasing its position in a bidding contest for a large-scale drug substance plant in the U.S. this summer, South Korea’s Celltrion has sealed the deal.
Celltrion—which specializes in biosimilar drugs—has inked an agreement to purchase Eli Lilly’s drug substance plant in Branchburg, New Jersey, for 460 billion Korean won ($330 million), according to a Sept. 23 shareholder letter. The deal is expected to close by the end of the year, the company noted.
Celltrion said it will retain all employees at the Branchburg facility and begin its own operations there “immediately.” The company pointed to existing CDMO contracts at the site, which it expects will “provide immediate revenue streams and accelerate recovery of invested capital.”
The increased U.S. production capacity is also expected to curb costs related to U.S.-bound shipments and external contract manufacturing expenses, Celltrion added.
The plant spans 37 acres, with another 10 reserved for future expansion, Celltrion said. It is equipped to handle the full production cycle—from drug substance manufacturing to finished products—as well as packaging, logistics and sales.
Celltrion hasn’t minced words about why it sought to purchase the plant. The move forms part of the Korean company’s strategy to “proactively” respond to the risk of pharmaceutical import tariffs under the second Trump administration.
Once the acquired facility is validated—in a process that’s expected to take around 12 to 18 months—Celltrion will be able to make and supply its U.S.-bound products directly from the New Jersey facility, the company said.
Along with efforts to transfer two years’ worth of inventory to the U.S. and expand agreements with local contract manufacturing partners, Celltrion stressed that the facility purchase from Lilly has “fully eliminated all potential future tariff risks related to its products in the U.S. market.”
As for next steps, Celltrion said it plans to transfer operations and complete closing procedures at the newly acquired facility by the end of 2025.
Celltrion’s confirmation of the purchase comes roughly two months after the company said it had become the preferred bidder on the plant. At the time, the company did not disclose the facility’s exact location nor its former owner, Eli Lilly.
Around the same time, Celltrion released a detailed tariff mitigation strategy, which referred to the proposed plant acquisition as “a fundamental solution to the tariff issue.”
While President Donald Trump had previously warned that pharmaceutical imports into the U.S. could be taxed at a rate as high as 200%, the reality of the tariff situation has, so far, been less severe than expected for the biopharma industry.
Under a trade deal announced between the U.S. and the EU last month, many goods coming into the U.S. from Europe—including pharmaceuticals—will be subject to a 15% duty, well below the figures the administration had previously threatened. Additionally, generic medicines—which make up the bulk of U.S. prescriptions—will face a separate “most favored nation” tariff rate, which an EU document from earlier this year suggested would be “effectively zero or close to zero.”
The terms of a trade deal announced with Japan earlier this month were much the same.
Even as the Trump administration’s tariffs emerge and prove to be less severe than feared, many drugmakers have nevertheless announced significant investments to beef up their U.S. production.
Most recently, GSK announced plans to invest $30 billion in the U.S. through the end of the decade to establish new plants, expand existing facilities and strengthen its R&D infrastructure in the country. Days earlier, Gilead Sciences broke ground on a new pharmaceutical development and manufacturing hub in California as part of its own $32 billion U.S. outlay.
Meanwhile, some of the biggest onshoring announcements this year came from Johnson & Johnson, which has pledged $55 billion in U.S. spending, and AstraZeneca and Roche, which have each committed $50 billion to bolster their U.S. operations.