South Korean Couple Builds $100 Billion Pharmaceutical Company, Signs Major Deal with Merck, Launching into Growth Mode

In April 2024, Forbes released the list of South Korean billionaires, where Dr. Park Soon-jae, co-founder and CEO of the South Korean biopharmaceutical company Alteogen, made his debut. He is the only one from the pharmaceutical industry among the four newcomers on the list.

This recognition is attributed to Alteogen's announcement in February 2024 of a lucrative new collaboration with the American pharmaceutical giant Merck. According to the new terms of cooperation, Merck will receive global exclusive rights to Alteogen's proprietary recombinant human hyaluronidase, ALT-B4, for the development and commercialization of a subcutaneous formulation of “K drug” (Keytruda, pembrolizumab). Alteogen will receive a $20 million upfront payment and is eligible for up to $432 million in additional milestone payments, along with royalties based on product sales. (The previous collaboration between the two was a non-exclusive license.) Dr. Park stated in media interviews that this partnership is expected to yield the largest technology fee revenue in the history of South Korean biotechnology.

Following the announcement, Alteogen's stock price surged, leading to an increase in the net worth of Dr. Park's family, and Dr. Park entered the billionaire ranks. As of September 25, 2024, the company's market capitalization reached $13.62 billion (approximately 100 billion RMB).

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Reflecting back to early 2024, South Korean food giant Orion Group announced an investment of approximately $418 million (around 3 billion RMB) to acquire a 25.7% stake in LegoChem Biosciences, becoming its largest shareholder. Prior to this, Orion had also engaged in equity investment negotiations with Alteogen, but those talks ultimately stalled.

Alteogen was co-founded in May 2008 by Dr. Park Soon-jae and his wife, Dr. Chung Hye-shin. Both hold Ph.D. degrees in biochemistry from Purdue University. Dr. Chung served as the company's Chief Scientific Officer and developed the company's long-acting protein drug technology, NexP?. Reports indicate that Dr. Chung left Alteogen in September 2023 and sold her 3% stake for 316.4 billion won (approximately $234.24 million) to foreign institutional investors in March 2024.

Dr. Park has over 25 years of experience in biomedical R&D. He initially served as a senior researcher at LG Chem and LG Life Sciences, successfully developing recombinant biopharmaceuticals such as human growth hormone, erythropoietin, and hepatitis vaccines. In the later stages of his tenure at LG Life Sciences, Dr. Park was responsible for managing overseas business development and collaborations, establishing business networks with various pharmaceutical and biotechnology companies, and accumulating experience in business development. After leaving LG Life Sciences, he assisted Hanwha Group in developing antibody biosimilars and established related organizations and pipelines. He is recognized as one of the leading figures in South Korean biomedical R&D and commercialization and was selected as one of the "100 Most Influential Technologies and Individuals in Korea in 60 Years" awarded by the Korean National Academy of Engineering in 2010.

Alteogen went public on the KOSDAQ (KOSDAQ: 196170) in December 2014. The company is now a technology-leading biopharmaceutical firm focusing on cutting-edge areas in the industry, primarily developing three types of products: improved long-acting biologics (referred to as Bio-better), ADC drugs, and antibody biosimilars, and conducting joint research and development and CMO contract manufacturing with domestic and international biopharmaceutical companies.

Since its establishment, Alteogen has successfully built three major technology platforms: long-acting technology NexP?, ADC technology NexMab?, and subcutaneous (sc) technology Hybrozyme?.

Recombinant Human Hyaluronidase

The Hybrozyme? technology was independently developed by Alteogen. It utilizes domain swapping between two structurally similar enzymes based on protein engineering, enhancing the conformational flexibility and thermal stability of the target enzyme while maintaining its inherent catalytic mechanism. Through this technology, Alteogen has developed a proprietary recombinant human hyaluronidase, ALT-B4, which can convert intravenous (IV) drugs into subcutaneous (SC) formulations.

Currently, only a few companies globally, including Alteogen and the American firm Halozyme Therapeutics, possess the technology to convert intravenous antibody formulations into subcutaneous formulations using hyaluronidase. Alteogen's newly developed recombinant human hyaluronidase maintains the same mechanism of action and enzyme activity as Halozyme Therapeutics' recombinant human hyaluronidase (rHuPH20) while increasing thermal stability, thereby enhancing protein stability and improving yield and cost-effectiveness. (Shanghai-based Baoji Pharmaceutical from China is also developing similar products.)

Reports indicate that Alteogen has established collaborations regarding this technology with four companies, including Merck, Intas, and Sandoz, with two products currently undergoing clinical trials.

Based on the Hybrozyme? technology, Alteogen has also developed a recombinant human hyaluronidase product (ALT-BB4, Tergase), which, in addition to being an adjuvant for subcutaneous formulations of antibody therapeutics or protein products, will also be marketed as a proprietary product for use in dermatology, ophthalmology, plastic surgery, and postoperative swelling and pain relief. In July 2024, Alteogen announced that the Korean Ministry of Food and Drug Safety (MFDS) approved its New Drug Application (NDA) for Tergase? (recombinant hyaluronidase, development code ALT-BB4). Reports indicate that Tergase? has a purity exceeding 99% and low immunogenicity. This NDA application was supported by a key Phase 1 clinical trial, which achieved its primary endpoint, showing that the rate of allergic reactions during intradermal administration in the test group was significantly lower than the recommendations from the U.S. FDA, with a reported incidence of anti-drug antibodies (ADA) of zero.

According to the revised guidelines for the drug price negotiation program under the Inflation Reduction Act (IRA) in the U.S., fixed-dose combination drugs containing hyaluronidase as an active ingredient will be considered new drugs. This means that hyaluronidase is likely to become a strategy for pharmaceutical companies to circumvent drug price negotiations.

Long-Acting Biologics

NexP? fusion technology is a second-generation long-acting technology independently developed by Alteogen. It utilizes the abundant human A1AT (Alpha-1 Antitrypsin) protein found in human blood as a protein carrier. This allows for the fusion of proteins or peptides at either the C-terminus or N-terminus, thereby extending the half-life of biologics through recombinant DNA technology. Therapeutic proteins or peptides developed using the NexP? technology exhibit excellent long-acting characteristics without losing drug activity. Preclinical pharmacokinetic and pharmacodynamic studies have shown that this technology significantly increases the in vivo half-life of drugs and enhances their efficacy, featuring benefits such as reduced dosing frequency, fewer side effects, and good clinical efficacy. NexP? technology serves as the foundational technology for the company’s next-generation long-acting therapies.

Alteogen is currently developing long-acting human growth hormone ALT-P1 using its NexP? platform technology. ALT-P1 is Alteogen's flagship biobetter product, combining human growth hormone with the NexP? protein carrier. In preclinical trials, ALT-P1 has demonstrated higher efficacy and a longer half-life compared to the first-generation human growth hormone. Additionally, the safety of ALT-P1 has been clearly established in Phase 1 clinical trials conducted on healthy males. Due to the lower therapeutic dose requirements, ALT-P1 is expected to exhibit lower toxicity and/or fewer side effects than other available or under-development human growth hormones. Therefore, it is reasonable to anticipate that ALT-P1 will be developed as a leading therapy among its peers.

Currently, ALT-P1 is undergoing Phase 2 clinical trials in patients with growth hormone deficiency.

According to data from YaoRongYun, Alteogen reached a cooperation agreement with the Brazilian pharmaceutical company Cristalia in July 2019 to jointly develop and commercialize ALT-P1 for the treatment of growth disorders. According to Alteogen's financial reports, both parties signed a modification agreement at the end of 2021, whereby Cristalia will obtain sales rights in South America after the completion of clinical trials, while Alteogen will facilitate the product's licensing approval globally outside of South America.

Next-Generation ADC Technology

NexMab? ADC technology is a next-generation ADC coupling technology that achieves site-specific conjugation through recombinant DNA technology. It selectively connects anticancer drugs to specific regions (C-terminus) of antibodies, allowing the drugs to attach to antibodies while preserving the original structure of the antibodies as much as possible. This ensures that the inherent activity of the antibody is unaffected, and the drug is less prone to degradation in the bloodstream, demonstrating good in vivo persistence, high targeting of cancer cells, and strong anticancer therapeutic effects. ADC drugs developed using NexMab? technology can achieve stability, efficacy, and economic feasibility.

Alteogen is currently using the NexMab? ADC technology to develop a drug, ALT-P7, targeting breast cancer and gastric cancer. ALT-P7 is a HER2-targeted ADC drug developed using NexMab? ADC technology. Reports indicate that HER2 is overexpressed in 20-25% of breast cancer patients and in 10-15% of gastric cancer patients, making HER2 one of the most successful anticancer targets.

ALT-P7 features site-specific conjugation of its payload drug to the HER2-targeting antibody. Compared to non-site-specific conjugation, ALT-P7 is expected to be a safer and better alternative anticancer drug. ALT-P7 has completed Phase 1 clinical trials in South Korea, and according to the company's financial report, this candidate drug is the first ADC for breast cancer to complete Phase 1 clinical trials in South Korea. In addition to breast cancer and gastric cancer, Alteogen is considering future combinations of ALT-P7 with other drugs to treat multiple indications.

In 2015, Alteogen entered into an exclusive licensing agreement with Simcere Pharmaceutical to develop, manufacture, and sell ALT-P7 in mainland China, Hong Kong, and Macau; however, there have been no subsequent reports of progress regarding this collaboration. In November 2017, Alteogen reached a GMP cooperation agreement with Levena Biopharma (a subsidiary of Sorrento Therapeutics) to support clinical research for its ADC product ALT-P7.

Biologics and Biosimilars

Alteogen's biosimilars are primarily developed in collaboration with overseas partners. With researchers possessing years of experience in the R&D and commercialization of biologics, Alteogen has been developing its own high-expression, efficient processes (both upstream and downstream) and optimized analytical methods for monoclonal antibody biosimilars. Currently, Alteogen has quickly developed two high-quality biosimilars (ALT-L9, a biosimilar to Eylea, and ALT-L2, a biosimilar to Herceptin) using its own production processes (including cell culture and purification). These processes ensure that Alteogen's biosimilars maintain "comparability" with the original biologics.

Alteogen is currently collaborating with strategic alliance partner Kissei Pharmaceutical in Japan to develop the biosimilar ALT-L9 for Eylea (Aflibercept). In October 2020, Alteogen established a subsidiary, Altos Biologics, responsible for conducting global Phase 3 clinical trials and overseas sales for ALT-L9. In March 2021, Altos Biologics signed a domestic sales licensing agreement with a major domestic ophthalmic pharmaceutical company in South Korea, and in December 2021, it submitted an IND application to initiate global Phase 3 clinical trials.

In July 2024, Alteogen announced that Altos Biologics had submitted a Marketing Authorization Application (MAA) for ALT-L9 to the European Medicines Agency (EMA), expecting approval before 2025, aligning with the expiration date of the original substance patent for Aflibercept. The company also plans to negotiate licensing agreements with potential global distributors. In September 2024, the company announced it had applied for a marketing license for ALT-L9 in South Korea.

ALT-L2 is Alteogen's biosimilar to Herceptin (Trastuzumab). According to data from YaoRongYun, Alteogen's development partners for this drug include Brazilian pharmaceutical company Cristalia and China's Qilu Pharmaceutical. In July 2024, Qilu Pharmaceutical's biosimilar to Trastuzumab (Antrastu?; research code QL1701) received marketing authorization in China for the treatment of HER2-positive early-stage breast cancer, metastatic breast cancer, and metastatic gastric cancer. Furthermore, Alteogen is considering utilizing its Hybrozyme? technology to develop a subcutaneous formulation of Herceptin biosimilar and has completed equivalence testing with Roche's subcutaneous Trastuzumab. The company is considering launching a biosimilar of the subcutaneous formulation of Trastuzumab through technology transfer with global pharmaceutical companies.

Financial Status

In 2023, Alteogen's total revenue reached 96.52 billion KRW (approximately 74 million USD), representing a year-on-year increase of 235.08%. Of this amount, 83.33 billion KRW (64 million USD) came from technology service revenue, primarily related to the recombinant human hyaluronidase ALT-B4, accounting for 86.3% of the company’s total annual revenue.

The total cost of sales for the year was 65.32 billion KRW, resulting in a gross profit of 31.20 billion KRW. Selling, general, and administrative expenses amounted to 40.93 billion KRW, leading to an operating loss of 9.737 billion KRW. The total research and development expenses for the year were 97.60 billion KRW (75 million USD), with R&D expenses accounting for 101.12% of sales revenue.

As of the end of 2023, Alteogen had cash and cash equivalents totaling 30.20 billion KRW (23 million USD).

Data source

[1] http://www.alteogen.com/；
[2] https://firstwordpharma.com/story/5818493；
[3] https://www.mk.co.kr/news/society/10950336；
[4] https://startupdreamers.com/innovation/merck-deal-boosts-founder-of-little-known-korean-biotech-company-into-billionaire-ranks/；
[5] https://view.asiae.co.kr/article/2024040211025549993；