Celltrion's Shares Climb After Merger With Affiliate
By Kwanwoo Jun
Celltrion Inc.'s shares climbed after a merger between the biotech company and marketing affiliate Celltrion Healthcare.
The South Korean biosimilar company's stock rose as much as 20% to 241,000 won ($186.17) on Tuesday afternoon, on course for its biggest daily gain since March 31, 2020. The benchmark Kospi was up 0.6%.
The stock's rally followed Celltrion's announcement after market close on Thursday, the final trading day of 2023 in Seoul, that the company's board approved the merger and named new co-chief executives.
Each share of Celltrion Healthcare has been swapped for 0.449 new share of Celltrion Inc. under the merger. The new shares will start trading Jan. 12.
Daishin Securities said in a recent research note that the merger can improve transparency at the biotech company by simplifying its transaction structure and can help secure its cost competitiveness. "The possibility of large-scale investment is also open with the combined resources," Daishin added.
The company could incur post-merger costs related to inventory assets and amortization, but the market appears to have already factored in those issues, KB Securities analyst Kim Hye-min said in a recent research note.
Kim said she expects Celltrion to sustain solid revenue growth from its biosimilar products such as Remsima SC and Yuflyma in the coming years. She estimated revenue to rise 10.2% to KRW2.692 trillion and operating profit to increase 14.5% to KRW926.70 billion for 2024.
Celltrion said in a statement Thursday that it aims to boost its annual revenue to KRW12 trillion by 2030.
Write to Kwanwoo Jun at kwanwoo.jun@wsj.com
(END) Dow Jones Newswires
January 02, 2024 01:12 ET (06:12 GMT)
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