Celltrion expects Covid variants to fuel global treatments growth

South Korean biopharmaceuticals group Celltrion is betting that new variants of Covid-19 will fuel growth in the US and Europe for treatments of the disease, even as these markets vaccinate their populations.

The company expects its new Covid-19 antibody treatment to generate up to Won1.5tn ($1.3bn) of annual sales after animal tests showed it is effective against rapidly spreading coronavirus variants.

Celltrion is the only Asian developer of antiviral treatments for Covid-19 alongside Regeneron, Eli Lilly and GlaxoSmithKline, to have received the European Medicines Agency’s equivalent of emergency approval.

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Kee Woo-sung, Celltrion’s chief executive, told the Financial Times that there was a huge market for treatments such as those used to bolster the immune systems of patients struggling to mount their own response to the disease.

“The market for Covid-19 vaccines is bigger than that of treatment, but there is a large enough market for treatment producers because production facilities are limited relative to growing demand,” Kee said.

“It is only a matter of time before we will see a flood of orders for our treatment because Regeneron has no room to ramp up production, while Lilly has admitted problems with its treatment in tackling variants.”

Celltrion developed South Korea’s first homegrown Covid treatment CT-P59, which it last month said significantly reduced the risk of hospitalisation or death by 70 per cent in patients and cut the recovery period by nearly five days in Phase 3 global clinical trials.

It won conditional approval for CT-P59 for emergency use from Korean health authorities in February and has administered it to 6,000 patients in the country. It has signed a contract with Pakistan to supply treatments for 100,000 people.

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It has also won emergency-use authorisation from the EMA and is in talks with several European countries to export the treatment as soon as final EMA approval is given, which Celltrion expects to get in August. It is also seeking approval from the US Food and Drug Administration.

“The most difficult thing about developing treatments is how to respond to variants,” said Kee. “But animal tests have shown that our treatment is effective in tackling most variants.”

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Celltrion plans to later this month announce animal test results on the highly infectious Delta variant first discovered in India. The company is targeting the US and Europe, which account for about 70 per cent of the global market for antibody treatments. Such treatments are costly and tricky to administer, being an infusion, not a pill.

Celltrion is also studying developing Covid-19 vaccines. However, the group has been targeted by short sellers in Korea due to concerns over biotech share valuations. The company’s operating profit rose 88 per cent to Won712bn in its 2020 financial year.

Some analysts said the Won1.5tn sales target seemed “too bullish” given that Celltrion’s likely entry to the US market next year means it will be playing catch-up with Regeneron and Lilly.

Lee Dong-geon, an analyst at Shinhan Investment expects Celltrion to grab 15 per cent of the US market for Covid-19 antibody treatments and 25 per cent in Europe, as the company will probably sell its treatment at a 30-50 per cent discount to its rivals.

“The number of Covid patients is bound to fall next year as countries speed up vaccinations,” he said. “Being a latecomer with relatively weak brand power and no sales experience in the US, it won’t be easy to steal a march on its US rivals.”

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