Shinhan Investment & Securities said on the 6th that Alteogen(196170) has a high chance of signing additional technology export deals in the second half after clinching a series of large contracts with global pharmaceutical companies this year. It maintained its buy rating and raised the target price to 480,000 won from the previous 477,000 won.
Eom Min-yong, a research fellow at Shinhan Investment & Securities, said, "Alteogen set a new record as the first among KOSDAQ biotechs to sign three global pharma license-out (L/O) deals in a single year," and noted, "There is a strong possibility of additional contracts with multiple partners in the second half."
Alteogen disclosed the previous day that it had signed a technology export contract worth 520 billion won. This is the third deal this year after GSK and Biogen, bringing the cumulative deal size this year to about 1.8 trillion won.
Shinhan Investment & Securities singled out the expansion of sales of "Keytruda SC" as the key factor that will determine Alteogen's performance. Keytruda SC is a product that changes the existing intravenous (IV) formulation to a subcutaneous (SC) injection. It significantly reduces time spent at the hospital, improving patient convenience.
Eom said, "Since the J-code procedure for insurance billing was completed in the United States in Apr., use of Keytruda SC has been increasing rapidly," and projected, "Within three months of launch, about 9% of all Keytruda prescriptions have shifted to the SC product, and the share will exceed 15% by year-end." As a result, second-quarter sales will reach $463 million (about 662.1 billion won), up 262% from the previous quarter.
He added, "This is more than twice as fast as the global consensus," and projected, "Assuming cumulative sales this year are about 3 trillion to 4 trillion won, the sales milestone that Alteogen will recognize (assuming 4% to 5%) will reach 200 billion won within the year."
Shinhan Investment & Securities also viewed positively Alteogen's decision to remain on KOSDAQ instead of a transfer to KOSPI. It said that if the government's KOSDAQ revitalization policy is fully launched, the company could be a primary beneficiary.
It projected a high likelihood that additional technology export deals will follow in the second half. Daiichi Sankyo's Enhertu SC, AstraZeneca (AZ)'s Imfinzi SC and Rilvegostomig SC, all applying Alteogen's SC platform, are in phase 1 trials. Sanofi's high-dose Dupixent SC formulation finished phase 1 and is set to move straight into phase 3 in the second half, while GSK, Biogen and Sandoz also plan to begin trials in the second half. If development by these companies proceeds smoothly, the likelihood of additional technology exports is high.