Alteogen said on the 8th that its preliminary operating profit on a consolidation basis for the first quarter was 39.3 billion won, down 35.6% from the same period a year earlier. Revenue for the period fell 14.5% to 71.6 billion won.
This is seen as a result of a base effect from record-high results in the first quarter of last year driven by a large technology out-licensing deal. Alteogen in March last year signed a technology transfer agreement worth a total of $1.35 billion (2 trillion won) with AstraZeneca in the United Kingdom for its subcutaneous (SC) formulation-conversion platform "Hybrozyme." The upfront payment alone was $45 million (60 billion won), which significantly boosted the first-quarter results last year.
Large technology out-licensing deals have continued this year. In the first quarter, Alteogen signed a $285 million (418.2 billion won) agreement with Tesaro Inc., a subsidiary of GSK plc in the United Kingdom, to develop an SC formulation of the immuno-oncology drug "Jemperli." It then signed a $579 million (849.6 billion won) agreement with Biogen in the United States to develop two therapies into SC formulations. However, because last year's AstraZeneca deal was so large, results did not reach the level of the same period a year earlier.
Hybrozyme is Alteogen's proprietary platform technology that converts high-dose biologics, such as antibody therapeutics administered by intravenous (IV) infusion, into subcutaneous (SC) formulations. Switching to an SC formulation can reduce infusion time and improve patient convenience. For global pharmaceutical companies, it offers the advantage of extending the product life of existing blockbuster drugs and strengthening differentiation strategies.
Alteogen also expressed expectations for future growth potential. The company said that after the launch of "Keytruda SC," which converted Merck's (MSD) immuno-oncology drug "Keytruda" into an SC formulation, the competitiveness of its platform has been validated in the global market.
The company projected that the switch to Keytruda SC will accelerate. That is because in Apr. it received a "J-code" for medical billing in the United States, reducing the burden of hospital prescribing and insurance claims procedures. Alteogen expects related milestone payments to begin in earnest from the second quarter of this year.
A J-code is a unique code assigned to hospital-administered injectables in the U.S. medical billing system (HCPCS). It standardizes drug type, dosage, and route of administration to streamline insurance claims and reduce administrative errors.
Jeon Tae-yeon, CEO of Alteogen, said, "We are currently in talks with multiple global pharmaceutical companies for additional technology out-licensing," and added, "We will expand the application scope of Hybrozyme and strengthen our mid- to long-term revenue structure based on stepwise milestones, future royalties, and supply sales."