The KOSDAQ "flagship stock" Alteogen's push to transfer and list on the Korea Composite Stock Price Index (KOSPI) has been shrouded in fog. The company aims to move to the "first division" KOSPI to boost corporate value, while KOSDAQ-related groups, worried the market will shrink as quality corporations leave, are appealing for it to stay.
◇ "Quality corporations should remain on KOSDAQ"… Alteogen "reviewing the situation"
According to the bio industry on the 14th, Alteogen is proceeding with practical preparations with the goal of a KOSPI transfer within this year. But the KOSDAQ Association, the Korea Venture Business Association, and the Korea Venture Capital Association issued a joint statement the day before, saying they "appeal for quality KOSDAQ corporations to remain in the market," throwing a strong check. In particular, it was confirmed that the KOSDAQ Association even sent an official letter directly to Alteogen requesting a reconsideration of the KOSPI transfer.
The reason the associations are reacting so sensitively is the market's "weight." Alteogen's market capitalization is currently about 19 trillion won. If Alteogen leaves, the KOSDAQ index itself will inevitably face downward pressure. In fact, when Celltrion transferred to KOSPI in 2018, 33 trillion won in market cap left at once, plunging the KOSDAQ market into major turmoil.
A bio industry official said, "Recently, KOSPI has been booming, buoyed by a semiconductor tailwind and eyeing a break above the 8,000 level, while KOSDAQ has been relatively overlooked," adding, "In this situation, if even the flagship stock leaves, investor confidence could crumble, which is the associations' concern."
◇ Burnish a "first-division" image or remain in the "second division"… the dilemma deepens
For Alteogen, a KOSPI transfer is a hard card to refuse. KOSPI has stricter listing and disclosure rules, making it advantageous to secure an external image as a "quality corporation." Above all, it can expect inflows of passive money from KOSPI-tracking funds (index funds) favored by foreign and institutional investors.
But public pressure from economic groups appears to be deepening the company's deliberations. An Alteogen official said, "We are continuing preparations for a transfer listing to enhance corporate value," while adding, "It seems necessary to review the situation from multiple angles to see which side is more favorable," taking a somewhat cautious stance. The preliminary screening application, which had initially been scheduled for submission right after the shareholders meeting in Mar., has not yet been filed.
◇ Technology is "all clear"… partner Merck gains advantage in patent dispute
The market environment is complex, but assessments say Alteogen's core technology remains solid. Alteogen has the "ALT-B4" technology, which converts an intravenous injection into a subcutaneous formulation, and it is applied to Merck's cancer drug "Keytruda."
Recently, the U.S. Patent Trial and Appeal Board invalidated part of competitor Halozyme's key patents, giving Merck, Alteogen's partner, the high ground.
Separately, Merck and Halozyme also fought in Germany. Halozyme sought a preliminary injunction to ban sales of subcutaneous Keytruda against Merck, and late last year the Munich Regional Court accepted it. Sales of subcutaneous Keytruda are currently suspended in Germany. The company says Germany does not account for a large share of Keytruda's overall sales.
Jeon Tae-yeon, Alteogen's CEO, said, "We have been able to reduce potential legal risks going forward," and noted the company will continue discussions on technology out-licensing. Alteogen posted 71.6 billion won in consolidated sales and 39.3 billion won in operating profit in the first quarter of this year. Those figures are down 15% and 36%, respectively, from the same period a year earlier.