Shinhan says Alteogen resolves patent dispute, secures 2 trillion won AstraZeneca deal

Shinhan Investment Securities noted on the 18th that Alteogen has signed a contract worth 2 trillion won related to the development of subcutaneous injection (SC) with the global pharmaceutical company AstraZeneca, and evaluated that the issue of patent disputes with Halozyme has been fully resolved. It maintained a buy investment opinion and a target stock price of 730,000 won. The closing price of Alteogen's previous trading day was 439,500 won.

Earlier, Alteogen announced that it had signed a technology export contract to develop an anticancer drug using the human hyaluronidase source technology 'ALT-B4' with MedImmune, a U.S. subsidiary of AstraZeneca. The total contract value is $1.35 billion (about 1.964 trillion won), and the contract fee is $45 million (about 65.2 billion won).

Research Institute Um Min-yong at Shinhan Investment Securities said, "The contract amount and contract fee for Merck's Keytruda SC are at an all-time high," adding, "If uncertainty arose from the Halozyme patent dispute, these contract conditions would be impossible."

Earlier last year, Goldman Sachs issued a report indicating that Alteogen's SC formulation technology 'ALT-B4' used in Merck's (MSD) immuno-oncological drug Keytruda may have infringed on Halozyme's same technology, MDASE, and that a lawsuit could be filed. Consequently, Alteogen's stock price fell.

Research Institute Um analyzed, "The contract with MedImmune involves two UK entities and one U.S. entity, with the contract with the UK entity estimated to involve two clinical substances. This marks the first SC contract for a clinical substance."

In particular, AstraZeneca revealed a more favorable technology transfer (L/O) than existing clients. In response, Research Institute Um said, "The SC development for improving efficacy and side effects is estimated to have a premium royalty," and added, "If the developed items are confirmed through clinical trials, additional valuation will be made."

He also explained, "This announcement effectively clarifies that the issue of patent disputes with Halozyme is not a major problem among big pharma companies," and added, "Currently, there are no issues with the patent dispute between Halozyme and Alteogen, which rather shows that Alteogen's patent holds superiority."