Celltrion’s Q3 operating profit tops 500 billion won for the first time; annual sales record in sight

[Financial News]
Celltrion posted record-high quarterly sales and operating profit in the third quarter of this year. In particular, operating profit for the first three quarters rose more than 85% from the same period last year, far outpacing sales growth. Expanded sales of high-margin biosimilars (copies of biologic drugs), together with cost improvements, appear to be boosting not only revenue but also profitability. If this trend continues into the fourth quarter, Celltrion is increasingly likely to set a new annual sales record.
 Celltrion disclosed on the 12th that it posted provisional consolidated sales of 1.5 trillion won and operating profit of 510 billion won in the third quarter of this year. Sales rose 45.8% and operating profit 69.2% from a year earlier. The operating margin was 34%, up 4.7 percentage points from the same period last year. It was the first time since the company was founded that quarterly operating profit exceeded 500 billion won.
 Cumulative results show an even clearer rise in profit. Sales through the third quarter of this year totaled 4.0387 trillion won, up 42.6% from 2.8323 trillion won in the same period last year. Over the same period, operating profit increased 85.3%, from 693.3 billion won to 1.2837 trillion won. Analysts say that operating profit growth, at nearly twice the rate of sales growth, points to an ongoing improvement in the company’s profit structure, with expanded sales translating into actual profit gains.
 Growth continued quarter by quarter. Sales rose steadily from 1.145 trillion won in the first quarter to 1.3937 trillion won in the second and 1.5 trillion won in the third. Operating profit also increased each quarter, from 321.9 billion won to 451.8 billion won and then 510 billion won. Celltrion exceeded all of the quarterly operating profit targets it set at the start of the year: 300 billion won for the first quarter, 400 billion won for the second and 500 billion won for the third.
 The improved results reflect expanded sales of both existing and follow-on products in global markets. In Europe, Remsima SC and Omlyclo were among the products driving growth. Omlyclo, which is sold in 26 European countries, had a market share of more than 90% in Spain as of July. In Denmark, the company expects it to reach a market share of at least 98% by year-end, following success in national tenders.
 In the United States, sales of follow-on products such as Steqeyma and Yuflyma are expanding, while existing products Truxima and Inflectra are also maintaining their market shares. As of August, Steqeyma and Yuflyma had market shares of around 15% and 11%, respectively, while Truxima and Inflectra had shares of 39% and 31%. The company said sales synergies are emerging across its product portfolio as the direct sales network built for existing products expands to new ones.
 Omlyclo, launched in the United States, is also expected to contribute more to results in the fourth quarter. It was listed as a preferred drug on the commercial insurance formulary of Optum, a U.S. pharmacy benefit manager (PBM). The company plans to promote wider prescribing by leveraging reimbursement coverage, while continuing to increase the share of high-margin products and improve costs.
 A Celltrion representative said, “The results show our ability to execute our growth strategy, including exceeding the quarterly profit targets set at the start of the year for three consecutive quarters. We will continue to increase the share of high-margin follow-on products and improve costs to enhance the quality of profit growth. At the same time, we will do our utmost to meet our annual business plan, building on growth drivers such as the launch of Omlyclo in the United States and expanded supply in Europe.” 
[email protected] Jeong Sang-hui Reporter