Celltrion (068270.KS) posted quarterly operating profit above 500 billion won for the first time since its founding. Both revenue and operating profit hit record quarterly highs, driven by expanding sales of high-margin follow-on biosimilars and improved production costs. The company is expected to clear the 600 billion won mark in operating profit in the fourth quarter, supported by a new product launch in the United States and expanded supply in Europe.
Celltrion said in a regulatory filing on the 12th that preliminary third-quarter revenue on a consolidated basis came in at 1.5 trillion won ($1.05 billion) and operating profit at 510 billion won ($357 million). Revenue rose 45.8% and operating profit climbed 69.2% from a year earlier. The operating margin stood at 34%, up 4.7 percentage points year-on-year.
The results mark the third consecutive quarter in which the company exceeded the quarterly operating profit targets it set at the start of the year. Celltrion had planned to raise profit in stages — 300 billion won in the first quarter, 400 billion won in the second, 500 billion won in the third and 600 billion won in the fourth. Meeting the fourth-quarter target would push annual operating profit above 1.8 trillion won.
Growth in high-margin follow-on products drove the earnings gain. In Europe, Omlyclo, an allergy treatment, led growth alongside Remsima SC, a subcutaneous treatment for autoimmune diseases. Omlyclo, sold in 26 European countries, held a market share of more than 90% in Spain as of July. In Denmark, the company expects to secure a share of more than 98% by year-end on the back of a national tender win.
Sales of both newer and older products expanded evenly in the United States. As of August, the autoimmune treatments Steqeyma and Yuflyma held market shares of 15% and 11%, respectively. Truxima and Inflectra, the company's existing core products, maintained shares of 39% and 31%. Analysts said sales synergies are emerging as the direct distribution and sales networks built through the older products extend to the newer ones.
Expanded supply in Europe and the U.S. launch of Omlyclo are expected to drive growth in the fourth quarter. In Europe, major national tenders and product deliveries are concentrated in the second half, while year-end inventory demand is also rising. Larger supply volumes of high-margin follow-on products should lift both revenue and profit margins.
Omlyclo, launched in the United States early this month as the first omalizumab biosimilar there, was listed as a preferred drug on the private insurance formulary of Optum, one of the three largest U.S. pharmacy benefit managers, at the time of its launch. With insurance reimbursement set to take effect in the fourth quarter, the company has secured the insurance coverage needed to expand prescriptions from the earliest stage of the launch.
Analysts expect earnings growth to continue next year on the strength of the follow-on products. Securities analysts estimate Celltrion's 2027 revenue at 7.12 trillion won and operating profit at 2.46 trillion won.
Omlyclo and Avtozma, a treatment for rheumatoid arthritis, are seen as the keys to growth next year. DS Investment & Securities forecast Omlyclo revenue of 1.07 trillion won next year, up 103.6% from this year's estimate. It projected Avtozma revenue of 684 billion won, a 93.6% increase. Analysts said the follow-on products are establishing themselves as revenue sources to succeed the existing core lineup.
"We will continue to expand the share of high-margin follow-on products and improve costs to raise the quality of profit growth," a Celltrion official said. "Based on the U.S. launch of Omlyclo and expanded supply in Europe, we will work to meet both our fourth-quarter and full-year business plans."