[Why&Next]Biotech Facing a 580 Trillion Won "Patent Cliff," SC Conversion Is the Key to Survival

Celltrion targeting big pharma vs Alteogen supporting big pharma
K-bio takes opposite strategies in the race for the 80 trillion won market by 2030
EMA regulatory easing paves the way for a global leap

The clock of the global pharmaceutical and biotech market is rapidly ticking toward the so-called "patent cliff." As patents for blockbuster drugs with annual sales of more than 1 trillion won, which have supported the global pharmaceutical industry for the past several years, are set to begin expiring in earnest around 2026, global big pharma companies and biosimilar manufacturers are preparing for a showdown in the subcutaneous injection (SC) formulation market. With competition for share intensifying in a market worth about 580 trillion won (400 billion dollars), Celltrion and Alteogen, two leading Korean players, are drawing attention as potential global "game changers" with their contrasting strategies.

Big pharma on the 'defense'... Raising patent barriers and locking in patients

According to the biotech industry on February 4, global big pharma companies are building SC formulations as a "shield" in response to the patent expiration of existing intravenous (IV) formulations. This is an "evergreening" strategy, in which companies extend the effective patent life by changing the formulation. In September last year, Merck & Co. (MSD) obtained approval from the U.S. Food and Drug Administration (FDA) for the SC formulation of its immuno-oncology drug Keytruda, paving the way to maintain exclusivity after the IV patent expires in 2028. Earlier, Roche also moved to defend its market share by developing Herceptin SC in preparation for the patent expiration of Herceptin.

The reason big pharma companies are so focused on SC is clear. They aim to reduce administration time, which used to take more than 90 minutes in a hospital, to around 5 minutes, thereby locking patients into the SC market and fundamentally blocking the entry of future IV biosimilars. According to the report "Patent Cliff: Targeting the U.S. Biosimilar Market" by the Bioeconomy Research Center of the Korea Biotechnology Industry Organization, patents for about 200 drugs in the global market are expected to expire between last year and 2030. Among them, as many as 70 are blockbuster drugs with annual sales of more than 1 billion dollars (about 1.4 trillion won). The report estimates that the sales volume affected by patent expirations during this period will be at least 200 billion dollars and up to 400 billion dollars (about 290 trillion to 580 trillion won).

'Offensive' Celltrion vs. 'Defensive' Alteogen

Both Celltrion and Alteogen possess SC formulation technologies, but their approaches to the global market are completely different. If Celltrion is an "attacker" that directly targets big pharma's markets, Alteogen plays the role of a "defender" that helps big pharma protect its patents. Celltrion has chosen a straightforward strategy of "technology internalization." After becoming the first in the world to commercialize Remsima SC, the company recently completed approval-enabling clinical trials for Herzuma SC, which applies hyaluronidase. It plans to file for marketing authorization with European and Korean regulators within the next three months. Its strategy is to manufacture its own biosimilars in-house and sell them in the global market without paying external royalties, thereby directly taking market share from big pharma. Once it secures a product lineup that includes both IV and SC formulations, its expansion of global market share is expected to accelerate. Furthermore, the company plans to broaden its scope into contract manufacturing (CMO) for formulation changes that support the SC conversion of other companies' drugs.

Alteogen, by contrast, has adopted a strategy of supplying its human hyaluronidase platform (ALT-B4) to big pharma companies. It is regarded as having established itself as a key partner in big pharma's patent defense strategies. A representative example is MSD's Keytruda SC, which was approved in September last year. When big pharma companies adopt Alteogen's technology to defend against patent expirations of their original drugs, Alteogen receives milestones (stepwise technology fees) and royalties. Alteogen achieved record results last year, posting sales of 202.1 billion won and operating profit of 114.8 billion won. These figures reflect milestones linked to the U.S. and European approvals of Keytruda SC, as well as upfront payments from its contract with AstraZeneca. This year, as J-code assignment simplifies insurance claims for Keytruda SC and the number of countries where it is marketed expands, milestone inflows linked to sales are expected to begin in earnest.

The 80 trillion won 'SC gold rush' to begin in earnest by 2030

The SC formulation market has already become a key driver of growth for the biotech industry. Based on its convenience, it is expected to continue expanding. According to market research firm Research and Markets, the global SC market is projected to grow to 56.5 billion dollars (about 81.34 trillion won) by 2030.

This "80 trillion won gold rush" offers "patent extension" opportunities for originator companies and "market recapture" opportunities for challengers. In particular, starting this year, as the European Medicines Agency (EMA) fully implements its guidelines to streamline biosimilar clinical trials, Korean biotech companies (K-bio) with leading technologies are expected to penetrate the global market even faster. An industry insider predicted, "The year 2026 will be the first year in which the 580 trillion won patent cliff translates into an actual hit to sales," adding, "Celltrion's technology internalization strategy and Alteogen's platform-supply strategy will be key variables that expand the position of Korea's biotech industry within the global bio ecosystem."