[Edaily Reporter Kim Hyung-il ] Shinhan Investment Securities forecasts that Alteogen Inc.(196170)will emerge as a top-tier global biotech company through a large-scale technology transfer agreement with Novartis. The firm maintained its “Buy” rating and raised its target price by 12.5% from 480,000 won to 540,000 won.

On the 3rd, Eom Min-yong, an analyst at Shinhan Investment Securities, stated “This agreement with Novartis marks the first time globally that Alteogen Inc. and Novartis have joined forces to convert an intravenous (IV) gene therapy in the form of an antibody-oligonucleotide conjugate (AOC) into a subcutaneous (SC) formulation,” he said, adding, “It is significant that this agreement underscores the necessity of the SC conversion to other global gene therapy companies.”

On the 2nd, Alteogen Inc. signed an exclusive option and license agreement with Novartis for the development and commercialization of subcutaneous (SC) formulations of multiple biopharmaceuticals utilizing “ALT-B4,” a recombinant human hyaluronidase based on the Hybrozyme platform. If all options are exercised and milestones at each stage of development and commercialization are achieved, Alteogen Inc. could receive up to $3.223 billion (approximately 4.4165 trillion won). Following commercialization, the company will also receive separate royalties based on net sales.

With this agreement, Alteogen Inc. has secured its fourth ALT-B4 technology transfer deal so far this year. Researcher Eom predicted that, following the conclusion of a record number of technology transfer agreements this year alone, additional transfers are likely to follow in the second half of the year.

Although the upfront payment was not disclosed, Researcher Eom explained that it is necessary to refer to the terms of the technology transfer agreement with Biogen last March. Based on the terms at that time—which included an upfront payment of 30 billion won per product and an additional 15 billion won for each additional compound—he predicted that the Novartis agreement would also yield a higher amount per product than the Biogen deal.

Researcher Eom projected that the number of compounds covered by the Novartis agreement could expand to as many as 10. His analysis suggests that if the development of 10 products is confirmed, the company could recognize additional upfront payments totaling more than 200 billion won.

Novartis’ expansion of its gene therapy business was also cited as a factor driving the rise in Alteogen Inc.’s platform value. Analyst Eom noted that Novartis decided last year to acquire Avidity, a developer of AOCs and gene therapies, and highlighted that the company had identified three products as blockbuster candidates at the time.

He predicted that Avidity’s first product, Del-zota, would be approved in the first half of next year. Given that the follow-up products, Del-desiran and Del-brax, have sales targets of up to $7 billion and $4 billion, respectively, he analyzed that Novartis is highly likely to expand its business in the gene therapy market in the future.

Researcher Eom also viewed the expansion of the Keytruda SC business positively. He noted that a clinical trial combining Keytruda SC with Moderna’s mRNA cancer vaccine began last May, and that the combination patent could extend the period of protection against biosimilars. In July, the conversion rate for Keytruda SC rose to 10.6%.

The report also projected that Alteogen Inc. would maintain its competitive edge in the patent dispute with Halozyme. Analyst Eom noted that following the invalidation of Halozyme’s fifth patent related to MDASE, Alteogen Inc. achieved a record-high four technology transfer deals by September of this year, bringing the cumulative contract value to 16 trillion won.