Celltrion Holdings Co. has secured 1 trillion won ($732 million) in fresh funding to buy shares in its underperforming biosimilar subsidiary, a move that signals concern about persistent valuation discounts at South Korea’s largest biosimilar developer.
The holding company plans to deploy 500 billion won ($366 million) this year purchasing Celltrion Inc. shares in two market rounds beginning in August, raising its stake to 23.53%. The biosimilar unit has underperformed the broader Kospi index this year, despite recent regulatory wins including FDA interchangeability approval for its Humira biosimilar Yuflyma.
The funding source remains undisclosed, raising questions about the holding company’s financing strategy. Celltrion Holdings plans to transition from a pure holding company to a business holding company through potential mergers and acquisitions, with the remaining 500 billion won earmarked for such deals or additional share purchases if the stock remains undervalued.
The buyback follows earlier purchases of 124.2 billion won in Celltrion shares between May and June. Analysts remain divided on whether the strategy can address fundamental valuation concerns, with the stock trading at 0.7 times price-to-book ratio.
Celltrion Inc. has been expanding aggressively, targeting 22 biosimilar products by 2030 from its current portfolio of 11 approved medicines, though execution risks and rising debt levels continue to weigh on investor sentiment.
