With Seo Jeong-jin, honorary chairman of the Celltrion Group, deciding to make a surprise comeback two years following stepping away from management, it is expected that the merger of the three listed companies within the group—Celltrion, Celltrion Healthcare, and Celltrion Pharmaceuticals—will accelerate. This is because if Honorary Chairman Seo is appointed as co-chair of the board of directors of three listed affiliates, including Celltrion Holdings, the group’s holding company, he will be at the peak of decision-making for the merger of the three companies.
The Celltrion Group announced on the 3rd that it held a board meeting of each company and decided on an appointment agenda recommending Honorary Chairman Seo Jeong-jin as a candidate for inside director and co-chair of the board of directors of Celltrion Holdings, Celltrion, Celltrion Healthcare, and Celltrion Pharmaceuticals for a two-year term. As the agenda is approved at each company’s shareholders’ meeting and board of directors on the 28th, the honorary chairman will be able to make major management-related decisions for the Celltrion Group.
The investment industry expects that if Honorary Chairman Seo is appointed co-chair of the board of directors, the push for a merger between Celltrion, Celltrion Healthcare, and Celltrion Pharmaceuticals, which has been sluggish, will speed up. As Honorary Chairman Suh, as co-chairman, will be able to make final decisions in all four companies, there is a prospect that a detailed merger plan and shareholder agreement will be drawn up.
All four companies, where Honorary Chairman Seo will become co-chairman, are directly involved in the merger of the three companies. Looking at the group’s governance structure, the honorary chairman controls Celltrion and Celltrion Healthcare through a holding company called Celltrion Holdings, and Celltrion Pharmaceuticals through Celltrion.
Honorary Chairman Seo is the largest shareholder with a 97.19% stake in Celltrion Holdings. The largest shareholder of Celltrion and Celltrion Healthcare is Celltrion Holdings, with holdings holdings of 19.97% and 24.23% respectively. Celltrion, the largest shareholder of Celltrion Pharmaceuticals, holds a 54.87% stake in the company.
In particular, it is judged that the calculation of gains and losses from the merger, including interests between the shareholders of Celltrion and Celltrion Healthcare, where the two sons of honorary chairman Seo serve as the chairman of the board of directors, respectively, will be completed. At present, Celltrion Holdings, Celltrion, and Celltrion Pharmaceuticals are chaired by Seo Jin-seok, the eldest son of Honorary Chairman Seo. In the case of Celltrion Healthcare, his second son, Seo Jun-seok, is the chairman of the board.
All four companies, Celltrion Holdings, Celltrion, Celltrion Healthcare and Celltrion Pharmaceuticals, serve as the chairman of the board of directors, but a professional manager takes over as CEO and leads company management. In the case of Celltrion Holdings, as CEO Yoo Hun-young, one of Celltrion’s founding contributors, ends at the end of this month, it seems highly likely that Honorary Chairman Seo will take over this position.
As Celltrion CEO Ki Woo-seong’s term expires at the end of this month, the agenda for re-appointment of inside directors is on the rise. In the case of Celltrion Healthcare, CEO Kim Hyeong-ki’s term ends next year, but since the term of the board chairman Seo Jun-seok’s term ends at the end of this month, a re-appointment agenda is being proposed. Seo Jeong-soo, CEO of Celltrion Pharmaceuticals, will serve until next year. CEO Seo Jeong-soo is the younger brother of Honorary Chairman Seo.
It is predicted that the merger of the three companies will be a form in which Celltrion following the merger, which was born following Celltrion merged with its subsidiary Celltrion Pharmaceuticals, will merge once more with Celltrion Healthcare. In this way, the group’s governance structure will be simplified to ‘Seo Jeong-jin → Celltrion Holdings → integrated Celltrion’.
When the ‘integrated Celltrion’ is launched, the development, manufacturing, and sales of biopharmaceuticals and chemical medicines will be carried out in one place by Celltrion. It is to be equipped with the appearance of a global comprehensive biopharmaceutical company with all the functions of ‘development → production → distribution and sales’.
The group expects that Honorary Chairman Seo, as co-chairman, will actively lead decision-making on key issues needed to quickly launch major products in the US and align the ranks of the local distribution network. Currently, Celltrion is concentrating its efforts on creating a sustainable growth engine in the United States, the world’s largest pharmaceutical market.
Follow-up biosimilars (bioreplicative drugs) such as ‘Begzelma (anti-cancer drug, ingredient name: bevacizumab)’ and ‘Uplima (autoimmune disease treatment, ingredient name: adalimumab)’, which have already been released in Europe, have been approved and approved in the US. awaiting release. Celltrion Healthcare’s direct sales system in the US is also preparing for full-scale operation. In addition, ‘Remsima SC (autoimmune disease treatment, ingredient name infliximab)’, a next-generation strategic product that is already rapidly expanding its market share in Europe, went through an item approval application from the US Food and Drug Administration (FDA) in December of last year, and was sold at the end of this year. Approval is expected.
An official from the Celltrion Group said, “Current management believes that the honorary chairman’s charismatic leadership will be of great help in securing a foothold for growth in the U.S.” In a situation where there are a lot of pending issues such as mergers and acquisitions, and the merger of affiliates, honorary chairman Seo’s quick judgment and decision-making are urgently needed, so we actively promoted a temporary return to management at this board meeting.”