SEOUL - South Korean biopharmaceutical firm Celltrion posted record high profits in the third quarter, thanks to continued brisk shipment of its biosimilars of Roche's oncology agent Herceptin (trastuzumab) and Johnson & Johnson's rheumatoid arthritis agent Remicade (infliximab) to countries in South America, the Middles East and Asia.

Celltrion began selling the two biosmilars to its foreign partners beginning the fourth quarter of 2009 in the form of validation batches and safety stocks, Celltrion spokesman Kim Yong-Joong told PharmAsia News. "We are gearing up to sell the biosimilar products to our foreign partners around the world."

During the third quarter, Celltrion's sales rose 41 percent from the same quarter last year to KRW 51.5 billion ($46.46 million) while operating profit surged 101 percent to KRW 32.1 billion ($28.96 million) and net profit jumped 145 percent to KRW 30.6 billion ($27.60 million).

Kim expected Celltrion to maintain its strong upward momentum next year because the firm is establishing more sales networks, including in Japan.

"As seen in our recent deal in Japan, we will be selling our biosimilars in more foreign countries through partners in each country," Kim said

Celltrion tied up with Japanese firm Nippon Kayaku to bring its biosimilars of Herceptin and Remicade to the world's second-largest pharma market (Also see "Korea's Celltrion And Aprogen In Race To Sell Biosimilars In Japan" - Scrip, 2 November, 2010.).

"Thanks to our continued efforts to shift our focus from a contract manufacturing organization to biosimilars...more than 95 percent of our current sales and profits are generated from biosimilars now," said Kim, noting that the company's CMO business accounted for 79 percent of its sales last year and biosimilars accounted for 18 percent.

Eastern Bloc For Biosimilar Expansion

Unlike the optimistic forecast by Celltrion, some stock analysts caution that investors should wait to draw a clear picture of the future direction of Celltrion.

"Even though it won't have much problem in selling its biosimilars in Asia, I am not sure whether Celltrion will be able to sell its biosimilars in Europe and the U.S. as scheduled without any problems," said an analyst at a local securities company. "The launch of the biosimilars could be delayed in Europe and in the U.S. because of ... patent issues."

To avoid potential patent issues, Celltrion's Kim said the company is targeting its Herceptin biosimilar in Eastern bloc countries and some Western European countries where Herceptin is not patent protected.

"In addition to the potential patent issues, the fact that Celltrion classifies 70 percent of its R&D investment as an asset rather than a cost is also something I worry about, although its performance looks okay on the surface for now," the analyst said. "Thus, I think it remains to be seen whether the pharma will meet all the optimistic expectations it has raised so far."

Regardless, Celltrion stocks reached a 52-week high of KRW 29,900 ($26.97) Nov. 4 on Korea's second-tier KOSDAQ IT and biotech stock market.

- Peter Chang (p.chang@elsevier.com)

Korea's Celltrion Eyes Eastern Bloc For Biosimilar Expansion

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