[Market Focus] Alteogen Rises on Positive Assessments of Patent Trial Initiation

As of 9:30 a.m. on June 4, Alteogen shares on the KOSDAQ market were trading at 381,000 won, up 8.86% from the previous session's closing price. The rise appears to be driven by a series of securities firm reports viewing the decision to initiate the main trial for a U.S. Post Grant Review (PGR) related to Alteogen's technology as a positive development.

Back in 2020, global pharmaceutical company Merck (MSD) signed a technology transfer agreement to adopt Alteogen's hyaluronidase (ALT-B4) technology for the development of a subcutaneous (SC) formulation of its immuno-oncology drug Keytruda. This technology serves as a core platform for converting existing intravenous (IV) formulations into SC formulations. Merck filed a PGR with the U.S. Patent and Trademark Office (USPTO) last year against Halozyme, which holds a patent for SC drug delivery based on a human hyaluronidase variant (MDASE).

PGR is a procedure that can re-examine the validity of an already granted patent and potentially render it invalid. The initiation of a PGR itself means that the validity of Halozyme's patent is under challenge. In fact, based on all invalidation trials in the U.S., as of last year, the probability that a patent is completely invalidated once a trial is initiated was as high as 70%.

On this day, Kim Seona, an analyst at Hana Securities, stated, "Unless Halozyme amends its patent claims to a certain extent, it will be difficult for them to achieve a favorable outcome in this PGR dispute." She added, "Halozyme is likely aware of the unfavorable situation and may attempt amendments, settlements, or even abandonment."

Um Minyong, an analyst at Shinhan Investment Corp., also commented, "Most of Halozyme's arguments have been neutralized, removing the uncertainty surrounding the scheduled October launch of KeytrudaSC." He further predicted, "Even if Halozyme applies for a preliminary injunction to ban sales of KeytrudaSC, which incorporates Alteogen's technology, such a request is likely to be dismissed."

If KeytrudaSC is launched, Alteogen will recognize approximately 1.5 trillion won in sales milestones, as well as royalties amounting to 4-5% of total sales.

Shinhan Investment Corp. maintained its 'Buy' investment opinion and target price of 730,000 won. Hana Securities presented a 'BUY' rating and a target price of 440,000 won.