Celltrion

Dear Shareholders,

Our company has been closely monitoring the evolving U.S. pharmaceutical tariff policies and has proactively developed phased strategies to minimize their impact. With the recent designation of a preferred bidder for the acquisition of a biologics manufacturing plant in the United States—a fundamental solution to the tariff issue—we are pleased to promptly share the latest developments with our valued shareholders as follows:

1. Comprehensive Update on U.S. Tariff Response Strategy

• Short-term Response: Completed stockpiling of two years’ worth of inventory within the U.S.
• Mid-term Response: Expand contracts with local CMO companies to enable domestic production in the U.S. for products sold in the U.S
• Long-term Response: Designated as the preferred negotiating party for the acquisition of a biologics manufacturing plant in the U.S. Upon completion of the acquisition, this will serve as a fundamental solution capable of fully mitigating all future tariff-related risks.

2. Details on the Facility Acquisition in the U.S.

1) Overview

• The facility Celltrion is pursuing is a large-scale cGMP manufacturing plant in the U.S capable of producing drug substances (DS), currently owned by an undisclosed global pharmaceutical company. The plant is located within a major pharmaceutical cluster that has been manufacturing key biologics—such as cancer and autoimmune disease treatments—for several years.
• 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.

2) Expected Benefits

1. Resolution of Tariff Risk: Upon completion of the acquisition, the facility is expected to eliminate all future tariff-related risks for our pharmaceutical products. This involves completing the acquisition of a local manufacturing facility, which represents a fundamental solution to the tariff issue. By producing our core products sold in the U.S. directly on-site, we expect to completely eliminate the tariff risks associated with these products.

    

2. Capacity Expansion Through Facility Growth: We plan to initiate additional facility expansions in line with U.S. sales trends and product launch schedules. Once completed, production capacity is expected to increase by up to 1.5 times that of our Songdo Plant 2. This will not only strengthen our market responsiveness but also ensure that future product launches in the U.S. fall outside the scope of tariff impacts from the outset.

    

3. Immediate Revenue Generation Post-Acquisition: Approximately 50% of the facility’s capacity is currently under a CMO contract that grants exclusive rights to manufacture the seller’s biologics for five years. This will enable Celltrion to generate revenue immediately upon acquisition. We expect a swift return on investment as a result. The remaining 50% of capacity will be allocated to producing Celltrion’s major products currently sold in the U.S.

    

4. Enhanced Cost Competitiveness: Once the planned expansions are completed, the local facility will be capable of handling the entire production cycle—from drug substance (DS) and drug product (DP) manufacturing to packaging and distribution—for pharmaceuticals supplied in the U.S. With our U.S. 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.

    

5. Synergies Through Advanced Technology Adoption: With the acquisition of this plant, we plan to significantly strengthen our local research and development (R&D) capabilities in the U.S. Through this, we intend to actively introduce advanced technologies from the U.S. and other global markets to maximize synergies with our production base.

As a company that has grown together with our shareholders, we are committed to conducting a thorough due diligence process on the local manufacturing facility as quickly as possible to eliminate tariff-related risks at the root and enhance corporate and shareholder value. Furthermore, we will promptly share all updates related to the company’s key business matters, including the progress of the due diligence process, and strive to repay our shareholders’ continued trust and support.

Thank you.