Shinhan Investment Corp. analyzed on the 27th that concerns over the U.S. Inflation Reduction Act (IRA) price cuts, which were the cause of the recent decline in Alteogen's stock price, are excessive. It maintained its target price of 730,000 won and investment opinion of "buy." The closing price of Alteogen on the previous trading day was 331,500 won.
Eom Min-yong, a researcher at Shinhan Investment Corp., projected that the likelihood of a subcutaneous (SC) injection being included in the price cut list is small due to its clinical advantages. Among the products that have been on the market for over 13 years, 15 will have their price cuts published next February under the U.S. Medicare and Medicaid public insurance.
Researcher Eom said, "Concerns arose after a draft was announced stating that combination drugs without clinical benefits could be included in the price cut target," adding, "However, considering the results demonstrating various clinical advantages of SC, such as reduced side effects and shorter administration times, the market's concerns are excessive." He also emphasized that SC is beginning to be applied to clinical-stage drugs, indicating that for big pharma, it is not an option but a necessity.
There are also concerns that the U.S. release schedule for Keytruda SC could be adjusted due to patent litigation, which is expected to be alleviated by the initiation of the patent invalidation trial (PGR) at the U.S. Patent and Trademark Office (USPTO). Shinhan Investment Corp. anticipated that the PGR decision date would be on the 7th of next month.
Researcher Eom noted, "The additional response from Halozyme was submitted last April, and Merck's PGR claim was also conducted on the 7th of this month, so the review could start on November 7 of this year," and added, "It is important to monitor the submission of additional preliminary responses and the integration of PGR proceedings as the exact start time remains unclear."
Researcher Eom indicated that the initiation of PGR itself progresses over the possibility of invalidating Halozyme's patent, so it could be a significant turning point for Keytruda SC's October release schedule. He said, "Even if SC is included in the IRA price cut list, it will account for only about 10% of Keytruda SC's total sales, which is negligible," adding, "While it is necessary to monitor until the initiation of the invalidation trial, it is worth noting as a significant opportunity for a rebound."