[Edaily Reporter Kim Hyung-il ] Shinhan Investment Securities analyzed that, for Alteogen Inc.(196170), the number of products expected to switch to subcutaneous (SC) administration has decreased from three to two, following the failure of one of Novartis’s three antibody-oligonucleotide conjugate (AOC) products in Phase 3 clinical trials. Accordingly, the firm maintained its “Buy” rating but lowered the target price from 540,000 won to 520,000 won.

On the 9th, Eom Min-yong, an analyst at Shinhan Investment Securities, explained, “On the 2nd, Alteogen Inc. signed a technology transfer agreement with Novartis worth up to 4.4 trillion won, and we initially factored in the value of switching all three AOC products to subcutaneous (SC) administration.” He continued, “However, since Del-desiran—a treatment for Duchenne muscular dystrophy (DM1) and one of Novartis’s three AOC products—failed to meet the primary endpoint in its Phase 3 clinical trial, the number of products confirmed for subcutaneous (SC) conversion has decreased from three to two.”

Last October, Novartis acquired Avidity Biosciences, a developer of AOC and gene therapies, for approximately 16.4 trillion won, thereby securing three AOC products: Del-zota, Del-desiran, and Del-brax. Among these, Del-desiran is a treatment administered intravenously (IV) at 8-week intervals over a 54-week period.

Meanwhile, analysts noted that the development and technology transfer of the remaining products are proceeding smoothly. Researcher Eom predicted, “The approval process for Del-zota, which Novartis is developing with the goal of securing approval in the first half of next year, is proceeding smoothly, and there will be no changes to the subcutaneous (SC) development plan.” Researcher Eom noted that since Del-Brax is also being developed with a sales target of up to $4 billion (approximately 5.366 trillion won), the value of subcutaneous (SC) development for these two products continues to be factored in.

He also raised the possibility that Novartis may pursue the subcutaneous (SC) development of a total of 10 products in the future, including antibody-drug conjugates (ADCs) and bispecific antibodies, in addition to AOCs. Researcher Eom added, “If the development of existing AOC products changes, there is a possibility they could be replaced by other AOCs.”

Meanwhile, the actual contract value between Novartis and Alteogen Inc. amounts to a maximum of $3.223 billion (approximately 4.4165 trillion won) upon the exercise of all options and the achievement of development and commercialization milestones, with royalties payable separately following commercialization.