[Edaily Reporter Hong Ju-yeon ] Alteogen Inc.(196170), the company with the largest market capitalization on KOSDAQ, has tentatively put on hold its plans to relist on the Korea Exchange (KOSPI) and opted to remain on KOSDAQ. This comes seven months after the company officially announced its plans to relist amid expectations of reaching a market capitalization of 30 trillion won and secured approval at an extraordinary shareholders’ meeting last December. The decisive factor cited is that the market capitalization, which exceeded 24 trillion won at the time, had fallen to 14.4415 trillion won as of the 20th, significantly reducing the expected inflow of passive funds that a move to the KOSPI was expected to bring. In particular, analysts note that the company benefits from the KOSDAQ promotion-demotion system premium and is classified as a beneficiary of the government’s efforts to bolster the KOSDAQ market.

Hopes for a “Second Celltrion”… Last Year, It Aimed for a 30 Trillion Valuation

In a regulatory filing on the 16th, Alteogen Inc. stated, “After comprehensively reviewing recent changes in the capital market environment, as well as the government’s and the Korea Exchange’s policies to revitalize the KOSDAQ market, we have decided to temporarily postpone our application for a preliminary review of the transfer listing to the Main Board at this time.”

Last year, Alteogen Inc.’s rationale for pursuing the transfer was to enhance credibility and expand access to global capital. This is because the KOSPI is more advantageous than KOSDAQ for broadening the base of foreign and institutional investors. Additionally, the move was expected to enhance credibility during negotiations with multinational pharmaceutical companies. Coinciding with the imminent approval of Keytruda SC by the U.S. Food and Drug Administration (FDA), there were also expectations of increased liquidity and a revaluation of the company’s market capitalization following its inclusion in the KOSPI 200 and major exchange-traded funds (ETFs). At the time, analysts in the securities industry speculated that if the transfer listing succeeded, the company’s market capitalization—then standing at 24.8612 trillion won—could rise to over 30 trillion won. Celltrion, which moved from the KOSDAQ—where it was the top-ranked company by market capitalization in 2018—to the KOSPI, was cited as a benchmark.

Pressure from shareholders also served as a driving force. Hyung In-woo, CEO of Smart & Growth and the company’s second-largest shareholder, revealed that he had met with management to discuss the need for swift progress, while individual shareholders moved to submit an official proposal through a shareholder resolution. In response, the company formalized its review of the transfer listing via a shareholder notice, which led to approval at an extraordinary general meeting last December.

Stock Price Halved, Index Weighting Drops from 1% to 0.3%…

Rating Changed

from “Hold” to “Neutral” in One Month

However, the situation changed over the course of about half a year. Although Alteogen Inc.’s stock price surged to as high as 529,000 won during intraday trading early this year, the closing price on the 16th—the day the decision was announced—was 276,500 won, a 47.7% drop from the peak. Due to the decline in market capitalization, the expected weighting upon inclusion in the KOSPI 200 has fallen to approximately 0.3%. This figure represents a decrease of approximately 69% compared to estimates made at the time of the board resolution last year. External agency analyses also projected a net outflow of approximately 360 billion won in passive funds, such as ETFs, upon a move to the KOSPI, and recent securities firm reports have concluded that remaining on the KOSDAQ is more rational when supply and demand conditions and the broader market environment are comprehensively considered. Analysts have suggested that the move to the KOSPI—which was originally pursued to capitalize on the index inclusion effect—could actually have a negative impact on supply and demand.

The company’s stance on the transfer has shifted from “proceeding” to “on hold” within the past month. Jeon Tae-yeon, CEO of Alteogen Inc., announced last month at Bio USA that the company is reevaluating whether to proceed with the transfer. This is interpreted as the company having reassessed its market strategy by recalculating the projected weighting in the KOSPI 200 and the inflows and outflows of passive funds.

Policies by the government and the Korea Exchange (KRX) to revitalize KOSDAQ—including the introduction of the floating-point system, the creation of a new KOSDAQ benchmark index and ETF, and support for the National Growth Fund—also weighed heavily in the decision to remain on the KOSDAQ. The company stated that it comprehensively considered this policy environment and the potential for an increased KOSDAQ weighting within pension fund benchmarks. However, this decision is not a complete withdrawal of the transfer plan but rather a temporary postponement of the timeline. The company announced that it plans to reevaluate the matter in the future, taking into account market conditions, the impact on corporate value, and shareholder interests.

Alteogen Inc. spokesperson said, “After comprehensively reviewing the recent capital market environment and the government’s policies to revitalize KOSDAQ, we determined that, at this point, continuing our sustained growth as a leading innovative company on KOSDAQ is more in line with enhancing shareholder value.”

30% Bonus Share Issuance to Be Conducted Concurrently… Securities Industry: “All Elements of a ‘Promotion-Demotion System’ Premium Are in Place”

Along with its decision to remain on KOSDAQ, Alteogen Inc. also resolved to issue a 30% bonus share. Under the plan, 0.3 new shares will be allocated for every 1 share of common stock and Redeemable Convertible Preferred Stock (RCPS). This will result in the issuance of 16,068,790 new common shares and 122,037 new RCPS shares, increasing the total number of issued shares from 53,993,136 to 70,183,963. The funding will come from the capital reserve—specifically, the share premium of 8.095 billion won—which will be transferred to paid-in capital. The record date for the new share allocation is August 6, and the scheduled listing date is August 26.

This stock split is expected to lower the price per share and thereby increase accessibility for investors. However, a stock split merely adjusts the number of shares and the ex-split price; it is not directly related to an increase in corporate value. It differs structurally from cash dividends or share buybacks, as existing shareholders’ ownership percentages and total holding values remain unchanged, and no new cash flows into the company. Whether trading volume and turnover rate will actually improve after the new shares are listed remains to be seen.

Analysts in the securities industry suggest that the decision to remain listed could actually lead to policy benefits. Kim Seon-ah, an analyst at Hana Securities, stated, “Alteogen Inc.’s current stock price is at the same level as when it plummeted in November 2024 after Halozyme filed a patent invalidation review (PGR) against Merck (MSD),” adding “Given that Alteogen Inc. has seen a series of positive developments—including contracts with major pharmaceutical companies such as AstraZeneca (AZ) and GlaxoSmithKline (GSK), as well as its victory in the patent invalidation trial (PGR) against MSD—the current stock price is difficult to justify.”

According to Analyst Kim, the patent invalidation review filed by Halozyme concluded with a final invalidation ruling, and it appears that the remaining 14 family patents will also be sequentially invalidated. In the UK, the dispute was resolved after Halozyme abandoned its patents, and in Germany, a case to revoke the preliminary injunction issued following the preliminary ruling on patent invalidation is currently pending. For Keytruda Qurex, revenue based on both prescription volume (TRx) and wholesale acquisition cost (WAC) continues to grow month-over-month due to the issuance of the U.S. insurance claim code (J-Code), and performance is expected to be confirmed in MSD’s second-quarter earnings announcement scheduled for August 4.

Analyst Kim stated, “With Alteogen Inc.’s decision to remain on the KOSDAQ, the likelihood that it will benefit from policies aimed at revitalizing the KOSDAQ market has increased.” He added, “The company possesses all the factors that qualify it for a ‘promotion-demotion system’ premium—including a high market capitalization, stable operating profit margin, and a track record of technology transfers—making it a strong candidate for inclusion in both the National Growth Fund and the premium sector. If a technology transfer occurs in July, it will further solidify these expectations.”