[Kyoto (Japan) = E-Daily Reporter KIM SAE-MI ] “It can be said that Celltrion’s Japanese subsidiary has now moved beyond the stage of selling individual products one by one and has entered a phase where ‘portfolio effects’ are becoming evident. From the perspective of the Japanese subsidiary, we view this year as a time when we can make another ‘quantum leap.’”

Kim Ho-woong, Head of Celltrion’s JAL Division (Vice President), met with E-Daily in Kyoto, Japan, on the 15th and identified portfolio expansion and the omalizumab biosimilar “Omriclo” (CT-P39) as the next growth drivers for the company’s Japanese business.

Since Remsima rose to the top of the infliximab market in Japan 11 years after its launch and established a local sales and distribution infrastructure, the plan is to use this as a springboard to quickly establish follow-up products and expand the Japanese subsidiary’s scale.

11 Years of Infrastructure Built in the “Graveyard of Foreign Products”… Now Leveraging Portfolio Synergies

Celltrion(068270)In Japan—where switching prescriptions is difficult to achieve through price competitiveness alone—the company has built long-term trust with healthcare professionals and distribution networks. Regarding the Japanese market, Division Head Kim described it as “a market where it is difficult to change the system through a single approach.” This is due to a complex interplay of factors, including the high-cost medical care system, the designated intractable diseases system, the influence of regional university hospitals and key opinion leaders (KOLs), and the strong distribution influence of large pharmaceutical wholesalers known as “Oroshi.”

In particular, Japan’s “Oroshi” go beyond simple distribution to handle inventory and quality control, as well as provide support to medical institutions. The four major wholesalers have nationwide logistics networks and operate teams of Medical Specialists (MS) who visit pharmacies and clinics directly to provide information on pharmaceuticals.

“Oroshi are not merely entities that deliver pharmaceuticals,” explained Director Kim. “They provide integrated logistics, inventory, and quality management services—including managing hospital inventory and handling exchange procedures when quality issues arise—which results in a high degree of dependence on them by medical institutions.” He added, “It is not easy to penetrate the market independently without building a network with them.”

The high barriers to entry in the Japanese market spare even global Big Pharma companies. This year, Sanofi transferred the sales and marketing operations for its prostate cancer treatment “Zevtana” in Japan to the local pharmaceutical company Daiho Pharmaceutical. Pfizer also recently decided to suspend sales of its Avastin and Herceptin biosimilars currently on the market in Japan. This is why the Japanese pharmaceutical and biotech market is often referred to as the “graveyard of foreign products.”

From the very beginning of its entry into Japan, Celltrion has built a long-term network with Oroshi, thereby compensating for its sales coverage, which was relatively weaker than that of local pharmaceutical companies. This local infrastructure, built up over 11 years, is now serving as an asset that accelerates the market entry of follow-on products.

Celltrion has currently commercialized six products in Japan and plans to increase this number to 11 by next year. Including products in the final stages of clinical trials or currently undergoing the approval process, the company is projected to expand its Japanese portfolio to 16 products within the next two to three years.

“While some other regions already have 11 products on the market, Japan has generated a similar level of sales with a relatively smaller number of products,” noted Division Head Kim, adding, “The situation will change as the number of products increases.” He went on to emphasize, “We view this year and next as a period during which our Japanese subsidiary can make another quantum leap.”

Breaking

New Ground with Omriclo… “We Will Grow the Japanese Allergy Market”

At the heart of this expansion of Celltrion’s Japanese business is Omliclo, set for launch later this year. While Celltrion Japan’s existing specialty business has focused on rheumatology, gastroenterology, and hematology/oncology, Omliclo will serve as a bridgehead to expand the sales network into new clinical areas such as pulmonology, general internal medicine, pediatrics, dermatology, and otolaryngology.

“This is a new challenge to expand into specialty areas where we haven’t previously operated,” said General Manager Kim. “It also means building an infrastructure that will allow us to enter these markets more smoothly when other products in these areas are introduced in the future,” he added. To this end, the company is expanding its “hybrid” sales and marketing organization, which combines product specialists with personnel who have strong networks among local medical professionals.

In particular, Celltrion plans to leverage data from Japanese subjects as a key asset for initial market penetration. Kim noted, “We have data demonstrating the bioequivalence of Omriclo from a pharmacokinetic (PK) study involving 65 healthy Japanese subjects,” adding, “This is a differentiating factor that allows healthcare professionals to approach its use with greater confidence when prescribing it to Japanese patients.”

The Japanese omalizumab market is estimated to be worth approximately 80 billion won, according to IQVIA. Considering the possibility that prices could fall to about half their current level within two to three years after the entry of biosimilars, the market size in value terms could shrink to about 40 billion won if the number of patients remains unchanged.

Accordingly, Celltrion Japan has established its Omriclo strategy around three pillars: “Market Development,” “Market Penetration,” and “Market Protection.” The number of patients receiving omalizumab treatment in Japan is estimated at approximately 50,000 for hay fever, 30,000 for chronic urticaria, and 20,000 for severe asthma. The plan is to use the healthcare savings generated by biosimilars to expand access to treatment, thereby broadening the patient base and growing the market itself.

“Compared to other countries, the omalizumab market in Japan is relatively underdeveloped,” said Director Kim. “We need to expand insurance guidelines so that we don’t just stop at reducing healthcare costs, but can reinvest the savings back into patient populations to improve access to treatment.”

The company also plans to actively leverage its first-mover status. Director Kim predicted that two to three follow-on biosimilars would enter the Japanese market within the next two to three years. The strategy is to quickly secure a prescription base before these competitors enter and then defend the market thereafter.

“We must rapidly increase our market share to secure a leading position and ensure that patients’ choices do not easily shift,” said Director Kim. “The trust we have built through data, quality, stable supply, and local production in Japan will serve as a barrier to entry for latecomers.”

Celltrion’s Japanese subsidiary is also expanding its organization in line with its portfolio growth. The company plans to increase its current workforce of just over 80 employees to more than 100 in the near future. Kim explained, “Three of Japan’s four major wholesalers have their headquarters near Tokyo Station, and our local manufacturing partners are also nearby.” He continued, “As our business expands, we relocated to a larger office last August to facilitate closer collaboration with these partners.”

Finally, he emphasized, “We achieved these results by patiently executing strategies tailored to the characteristics of the Japanese market,” adding, “We will apply the infrastructure we have built to the various new products set to enter the market, ensuring their successful launch while securing market leadership and establishing a structure that maintains profitability.”