From “technology exports” to “direct sales”: Alteogen Inc. to restructure its business through subsidiary merger

[Financial News] Alteogen Inc., a company known for exporting platform technologies, is moving to transform itself into a company that develops and sells its own new drugs directly.
Alteogen Inc. disclosed that its board decided on the 6th to absorb its subsidiary Alteogen Biologics through a small-scale merger. The two companies will sign the merger agreement on the 7th, and the merger will take effect on December 29.
Alteogen Biologics is a subsidiary in which Alteogen Inc. holds a 62.9% stake. It has completed the global Phase 3 clinical trial of the Eylea biosimilar ALT-L9 (brand names Aireokseubi and Aijenpiju) and received approval in Europe. It is also responsible for sales and marketing of Tergase injection and other products, as well as development of the macular degeneration drug candidate ALTS-OP01.
The merger ratio is 1 to 0.1679581 for Alteogen Inc. and Alteogen Biologics, respectively. Upon completion of the merger, Alteogen Inc. will issue 600,477 new shares to Alteogen Biologics shareholders. No new shares will be allocated for Alteogen Inc.’s 62.9% stake in Alteogen Biologics (shares held by the absorbing company). The merger ratio was determined based on Alteogen Inc.’s reference market price, calculated in accordance with relevant laws, and Alteogen Biologics’ intrinsic value, which was subject to an external valuation.
To review the merger, Alteogen Inc. formed a special committee made up of independent directors and sought assessments from external experts, including legal and financial advisers and securities underwriters. The committee reviewed the merger’s purpose and necessity, the appropriateness of its valuation methods and key assumptions, and fair treatment of shareholders. It recommended proceeding with the merger and asked the company to diligently carry out follow-up measures, including disclosure and communication with shareholders. The board approved the merger after taking the committee’s recommendations into account.
Through the merger, Alteogen Inc. plans to consolidate pipelines and business capabilities currently spread across its subsidiaries and strengthen its business structure from research and development through commercialization. Along with its recently finalized investment in production facilities, it plans to absorb Alteogen Biologics’ experience in global clinical trials and regulatory approvals, as well as its domestic and overseas sales and marketing teams, to build a foundation for commercializing products it develops in the future. It will bring dispersed teams and resources together to improve management efficiency and unify its investment and decision-making processes. The company expects its expertise in eye diseases to help broaden its growth prospects beyond the Hybrozyme platform.
An Alteogen Inc. representative said, “This merger is a turning point for Alteogen Inc., which has grown on the basis of the Hybrozyme platform, as it expands its business into developing and commercializing its own products. By securing new pipelines, including the novel macular degeneration treatment ALTS-OP01, and securing development capabilities, while bringing Alteogen Biologics’ sales and marketing staff and expertise in-house, we will reduce the time and burden of having to build a sales organization from scratch when commercializing our own products.” The representative added, “We will strengthen a business structure that connects research and development with production and sales, and continue to increase corporate and shareholder value over the medium to long term.”
Starting on the 7th, Alteogen Inc. will provide merger-related materials and frequently asked questions (FAQ) on its website and operate a channel for receiving shareholder feedback. The questions and comments received will be reflected, along with the company’s responses, in the securities registration statement and subsequent explanatory materials. On the 15th, it will hold a shareholder meeting in Daejeon to explain the merger’s purpose and expected benefits, as well as its future business plans. Alteogen Biologics will also hold a meeting for its shareholders on the 14th, one day earlier. Details, including the venues and how to participate, will be posted on each company’s website.
 


[email protected] Jeong Myeong-jin, Medical Specialist Reporter