[Edaily Reporter NA EUN-KYUNG ] “Keytruda Qlex (Keytruda SC),” an immunotherapy drug from U.S.-based Merck (MSD) that incorporates subcutaneous (SC) formulation conversion technology developed by Alteogen Inc.(196170), recorded a conversion rate of 15.8% in terms of sales approximately one year after its launch in the U.S. Global investment bank UBS projected that, if current trends continue, MSD will be able to achieve its target conversion rate of 30–40% by the end of next year.

According to industry sources on the 13th, UBS analyzed Keytruda Qlex’s market penetration rate in the U.S., the trend of switch-overs from competing products, and Alteogen Inc.’s future earnings in a report published on the 9th.

According to UBS, Keytruda SC’s U.S. sales in September totaled approximately $324 million (about 430 billion won). This accounted for 15.8% of Keytruda’s total sales of approximately $2.1 billion (about 2.8 trillion won) for the same period, which included both intravenous (IV) and subcutaneous (SC) formulations. Cumulative sales for the third quarter of this year (July–September) totaled $769 million (approximately 1 trillion won), representing 12.8% of total Keytruda sales of approximately $6 billion (approximately 8 trillion won).

However, these figures are not the actual net sales recognized by the pharmaceutical company but rather sales estimates calculated based on the wholesale acquisition cost (WAC) of the drug. UBS explained that while there is a high correlation of 99% between this metric and the sales figures disclosed by the pharmaceutical company, differences from actual net sales may occur due to discounts, rebates, and other factors.

The pace of transition to Keytruda SC is relatively fast even when compared to competing immuno-oncology drugs. According to UBS analysis, the transition rate for Keytruda SC was 15.8% approximately 11 months after launch, surpassing Bristol-Myers Squibb (BMS)’s “Opdivo SC” (approximately 7.9%) and Roche’s “T-Centrik SC” (less than 4%) at similar time points after their respective launches.

As of now, the adoption rates stand at 16.6% for Opdivo SC and 6.9% for Tecentriq SC. Opdivo SC was launched in the U.S. in January 2025, and Tecentriq SC in October 2024, meaning they have been on the market longer than Keytruda SC.

UBS also analyzed the transition trends following the assignment of a separate J-code used for insurance claims. The J-code has been applied to Keytruda SC since last April, and since then, the revenue share of the subcutaneous injection formulation has been rising in the U.S. market. UBS assessed that, even when comparing quarterly net sales on a like-for-like basis after adjusting for the time elapsed since launch, Keytruda SC has shown a faster transition trend than Opdivo SC.

Keytruda SC is a product that utilizes “ALT-B4,” the core active ingredient of Alteogen Inc.’s hyaluronidase-based formulation modification platform, “Hybrozyme.” It is characterized by converting the existing intravenous Keytruda into a subcutaneous injection formulation that can be administered within 1 to 2 minutes, thereby reducing administration time.

Expanded sales in the U.S. market are expected to generate additional revenue for Alteogen Inc. UBS noted that while the market forecast for global net sales of Keytruda SC in the third quarter of this year was approximately $690 million (about 900 billion won), sales in the U.S. market alone—based on wholesale acquisition cost—reached $769 million.

Accordingly, UBS projected that Alteogen Inc. would recognize approximately $50 million (about 66.6 billion won) in additional milestone payments based on third-quarter Keytruda SC sales performance. However, this is an estimate by UBS; the actual payment of milestones and their amounts must be confirmed through the fulfillment of contractual conditions and related disclosures.

Previously, in August, Alteogen Inc. announced that it was scheduled to receive the first sales milestone payment of $25 million (approximately 33.3 billion won) from MSD for Keytruda SC. The agreement with MSD includes sales milestones totaling $1 billion (approximately 1.3 trillion won). Once all contractual sales milestones have been achieved, the company will receive royalties at a rate in the low single digits, linked to the net sales of Keytruda SC.

However, unlike in the U.S., patent disputes in Europe are acting as a variable affecting commercial expansion. On the 7th, a court in The Hague, Netherlands, ruled that Keytruda SC infringes on a European patent held by U.S.-based Halozyme and issued an injunction prohibiting its manufacture and sale in eight European countries, including the Netherlands, France, and Italy.

UBS analyzed that this ruling could slow the pace of Kitruda SC’s transition in markets outside the U.S. in the short term. However, it explained that based on forecasts by market research firm Visible Alpha, projected 2027 sales for Kitruda SC are approximately $5 billion in the U.S. and approximately $1 billion outside the U.S., noting that the U.S. market’s share had already been heavily factored into the original projections.

UBS maintained its “Neutral” investment rating and target price of 310,000 won for Alteogen Inc. While the firm viewed the expansion of the Keytruda SC transition in the U.S. and the potential for additional milestone revenues positively, it also factored in the possibility of delays in overseas business expansion due to the European patent dispute.

An Alteogen Inc. official stated, “We have signed licensing agreements with global pharmaceutical companies, including MSD, regarding our ALT-B4-based subcutaneous injection formulation conversion technology,” adding, “Sales trends for Keytruda SC are expected to serve as a key indicator for Alteogen Inc. in securing revenue linked to actual drug sales following the technology transfer.”