South Korean pharmaceutical company Celltrion has announced that it has been selected as the preferred bidder to acquire a large biologics manufacturing plant in the United States —a strategic move aimed at insulating the company from potential US pharmaceutical tariffs.

US President Donald Trump said earlier this month threaten to impose pharmaceutical tariffs up to 200 percent.

During an online press conference, Celltrion Chairman Seo Jung-jin revealed plans to invest 700 billion won (USD 503 million) in the acquisition. Depending on market demand, the company could invest an additional 300 billion to 700 billion won for further expansion of the facility.

Celltrion has not yet disclosed the seller or the location but confirmed the plant is a large-scale cGMP-certified site capable of producing drug substances (DS) and is located within a major US pharmaceutical cluster specializing in key biologics—such as cancer and autoimmune disease treatments.  A formal agreement is likely to be signed in early October.

“Further details, including the name of the company that currently owns the acquired facility, will remain undisclosed until the signing of the final agreement, which is expected to take place in early October, in accordance with mutual agreement,” the company said in a letter to shareholders.

The company described the move as a long-term response to mitigate evolving US pharmaceutical tariff policies.

“Upon completion of the acquisition, this will serve as a fundamental solution capable of fully mitigating all future tariff-related risks,” Celltrion stated.

“By producing our core products sold in the US directly on-site, we expect to completely eliminate the tariff risks associated with these products,” it added.

Around 50 percent of the facility’s current capacity is under a Contract Manufacturing Organisation (CMO) deal, granting exclusive rights to manufacture the seller’s biologics for five years — enabling Celltrion to generate revenue immediately upon acquisition.

The remaining 50 percent of capacity will be allocated to producing Celltrion’s major products currently sold in the US.

Following planned expansions, production capacity is expected to grow to 1.5 times that of Celltrion’s Songdo Plant 2 in South Korea. The upgraded facility will eventually handle the entire production cycle—from drug substance and product manufacturing to packaging and distribution— for pharmaceuticals supplied in the US.

 “With our US sales network already in place, we expect to see substantial cost efficiencies from in-house manufacturing and logistics savings, thereby enhancing our overall cost competitiveness,” the company noted.

“With the acquisition of this plant, we plan to significantly strengthen our local research and development capabilities in the US. Through this, we intend to actively introduce advanced technologies from the US and other global markets to maximize synergies with our production base,” the letter added.

The acquisition is part of a broader three-phase strategy to minimize the potential tariff impact.

As a short-term response, the company has completed stockpiling of two years’ worth of inventory within the US.

For mid-term response, it has expanded contracts with local CMO companies to enable domestic production in the US for products sold in the US.