Alteogen shares plunged more than 22% intraday on the 21st. Investor sentiment slumped after the royalty terms for the subcutaneous (SC) formulation of the immuno-oncology drug Keytruda, commercialized with Merck (MSD), were confirmed at around 2%, lower than market expectations.
According to the Korea Exchange (KRX), Alteogen was trading at 373,000 won on the KOSDAQ as of 3:10 p.m. that day, down 22.45% from the previous session.
The direct trigger for this week's share-price drop is MSD's third-quarter report last year. Merck said in the report, "After the achievement of all sales-based milestones, a 2% royalty on net sales is payable to Alteogen."
Considering that global competitor Halozyme's royalty for SC formulation switching technology is typically in the 3%–7% range, the figure is seen as falling short of market expectations.
On top of that, the size of the technology transfer deal announced the day before fell short of investor expectations, prompting a wave of selling. Alteogen said it signed a 420 billion won technology transfer agreement with Tesaro, a subsidiary of GSK plc. However, the market had expected a deal on the scale of its most recent agreement with AstraZeneca (about 1.9 trillion won), citing the earlier remark by Alteogen CEO Jeon Tae-yeon that "the imminent technology transfer deal is similar in size to the existing deal."
The company says the disclosure of the royalty rate does not undermine the business performance of its platform. The company said, "ALT-B4 is a platform technology that enables subcutaneous formulation switching of existing blockbuster drugs, with a higher likelihood of success compared with new drug development," and added, "Because global big pharma handles the clinical trials and commercialization, long-term business stability remains intact."
Alteogen has signed technology transfer agreements with seven global pharmaceutical companies to date, including MSD, AstraZeneca, Daiichi Sankyo, and GSK. According to the company, aside from MSD's "Keytruda," Daiichi Sankyo's "Enhertu," and GSK's "Jemperli," other pipeline products under development span various modalities and targets, including monoclonal antibodies, bispecific antibodies, and ADCs.
A company official said, "The fundamentals remain solid," and emphasized, "We currently have three commercialized items and are pursuing business development with the goal of securing six or more additional commercialized items by 2030."