Alteogen shares plunged more than 22% intraday on the 21st. Investor sentiment deteriorated sharply after the royalty rate for the subcutaneous (SC) formulation of the immuno-oncology drug Keytruda, commercialized with Merck (MSD), was confirmed at around 2%, below market expectations.
According to the Korea Exchange (KRX), as of 3:10 p.m. the same day, Alteogen was trading at 373,000 won on the KOSDAQ market, down 22.45% from the previous session.
The direct trigger for this week's share price decline is MSD's third-quarter report. According to the report shared via DS Investment & Securities, the royalty rate that Alteogen receives from Keytruda SC sales is 2%. Considering that the 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.
In addition, the size of the technology transfer deal announced the previous day also fell short of investor expectations. Alteogen said it signed a 420 billion won technology transfer agreement with Tesaro, a subsidiary of GSK plc in the United States, but investors who had expected a trillion-won-level deal earlier unloaded shares.
Earlier, Chief Executive Jeon Tae-yeon of Alteogen had said, "The imminent technology transfer deal is similar in size to the existing deal," and the market had expected it to be on par with the previous AstraZeneca deal (about 1.9 trillion won).
However, 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 for existing blockbuster drugs, and it has a higher probability of success compared with new drug development," adding, "Given that global big pharma handles clinical development and commercialization, long-term business stability remains intact."
In fact, to date Alteogen has signed technology transfer agreements with seven global pharmaceutical companies, including MSD, AstraZeneca, Daiichi Sankyo, and GSK. According to the company, aside from the three products of MSD's "Keytruda," Daiichi Sankyo's "Enhertu," and GSK's "Jemperli," the remaining pipeline under development spans 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."