Alteogen Inc. to Continue SC Switch Despite U.S. Drug-Price-Cut Concerns, Saying “Growth Driver Remains Intact”

[Financial News] Alteogen Inc. is expected to sustain the switch to subcutaneous (SC) formulations as a growth driver despite concerns that changes to the U.S. drug price negotiation system could erode its long-term profitability.
Including the SC formulation of Keytruda in price negotiations could affect royalty revenue, but analysts say the value of the licensing deal remains intact given the convenience of administration and the potential to expand the pipeline.
On the 10th, IBK Investment & Securities lowered its target price for Alteogen Inc. from 400,000 won to 320,000 won, while maintaining its Buy rating. This represents upside of about 90% from the previous day’s closing price of 168,400 won.
Jeong Yi-su, a researcher at IBK Investment & Securities, adjusted the long-term profitability estimates to reflect changes to the U.S. drug price negotiation system, but judged that the stock still had substantial upside, given existing demand for the switch to SC and the expansion potential of new pipelines.
The key change to the drug price negotiation system is that the U.S. Centers for Medicare & Medicaid Services (CMS), in a final rule issued on the 5th, classified SC formulations containing added hyaluronidase as subject to the same price negotiations as existing intravenous (IV) products.
Accordingly, if IV Keytruda is selected for price negotiations in 2027, negotiated prices are expected to apply to Keytruda Qlex (SC) from 2029 as well.
Researcher Jeong explained, “Under this regulation, drug-price declines will be unavoidable even with the switch to SC, but the benefit of shorter administration times than with existing IV formulations—which improves convenience for patients and healthcare professionals—remains.” In other words, the competitiveness of SC formulations lies not only in helping defend prices but also in shortening administration times and making care more convenient.
IBK Investment & Securities projected that sales milestone revenue from Keytruda Qlex would total $1 billion by 2028. Its estimated royalty revenue for 2030, accounting for the impact of drug-price cuts, is about $300 million. The report projected that the SC conversion rate for Keytruda Qlex would rise from 7.5% in 2026 to 32.3% in 2028 and 65.0% in 2030.
The expansion of new pipelines is another factor to watch. AstraZeneca is developing the bispecific antibody rilvegostomig with Alteogen Inc.’s ALT-B4 incorporated from the drug-development stage. The platform could eventually be applied more broadly, extending beyond monoclonal antibodies to bispecific antibodies and antibody-drug conjugates (ADCs).
Researcher Jeong explained why the firm maintained its Buy rating despite lowering its target price: “Our short-term earnings outlook through 2028 is unchanged, and, given demand for existing products to switch to SC and the potential to expand the platform’s application to new pipelines, we believe the current share price has substantial upside.”

[email protected] Kang Jung-mo Reporter