Celltrion

Dear Shareholders,

In a recent speech shortly after his inauguration, U.S. President Donald Trump briefly mentioned that, along with semiconductors and steel, foreign-produced pharmaceuticals would also be subject to tariffs.

Given that some of our shareholders have expressed concerns regarding this statement, we would like to provide a brief overview of our current response strategy.

1. Outlook on the Trump Administration's Drug Tariff Policy

• To date, President Trump has not presented specific policy proposals regarding drug tariffs, and the actual implementation is still uncertain, requiring further review and policy observation.
• Tariffs on drugs could lead to rising drug prices in the U.S., imposing significant burdens on consumers and the healthcare system. Therefore, it is unclear whether President Trump will actually enforce such measures.
• Notably, during his first term, President Trump consistently pushed for lower drug prices, and this tariff policy would directly contradict his previous stance on drug pricing.

2. Company’s Response Strategy and Preparedness

Since the election of President Trump, we have closely analyzed various scenarios regarding the possibility of tariffs and have already in place a system capable of responding immediately, regardless of how the policy is implemented.

Short-Term Response: Securing Sufficient Inventory in the U.S.

• We currently have sufficient inventory of our products in the U.S. to meet demand until at least the third quarter of 2025, without the need for additional imports.
• For products that are expected to be depleted sooner, we have the capability to produce finished pharmaceuticals (DP) from active pharmaceutical ingredients (API) already imported to the U.S.

Mid-Term Response: Shift to a DS-centric Supply Strategy

• If tariffs are sustained in the long term, we plan to focus on exporting drug substances (DS), which are subject to lower tariffs, rather than finished drug products (DP) that face higher tariffs, and adjust our strategy to produce finished drug products at local manufacturing sites.
• We are already exploring cooperation with local companies that have sufficient manufacturing capacity to produce our products.

Long-Term Response: Evaluating Establishment of Local Manufacturing Facilities in the U.S.

• We are considering the acquisition or establishment of local manufacturing facilities in the U.S. capable of producing both finished drug products and drug substances.
• This would help us create a stable supply chain that is less affected by political and social changes in the U.S., while also expanding our market share in the U.S.

3. Exchange Rate Environment and Positive Outlook for Exporting Companies

• As mentioned earlier, if the Trump administration imposes tariffs, it is likely to increase the prices of consumer goods and raw materials in the U.S., leading to inflation.
• If inflation worsens, there is a higher possibility that the U.S. Federal Reserve will continue its tight monetary policy, which could result in sustained high exchange rates.
• A high exchange rate environment can be beneficial for global export companies like us, enhancing our competitiveness in the U.S. market and improving profitability.

In conclusion, we will continue to monitor the Trump administration's tariff policy direction and are fully prepared to respond immediately if the policy is enacted.

Moreover, in light of the changes in the global economic environment, we will leverage exchange rate fluctuations to maintain a stable profit structure and actively pursue long-term growth strategies. Additionally, we will strive to minimize supply and sales risks and maximize shareholder value through sustainable growth.

We thank our shareholders for their continued trust and support, and we promise to share updates on our response efforts promptly and transparently.

Thank you.