Alteogen is broadening its business scope from platform technology exports to the direct production and development of its own pharmaceuticals. The company aims to add revenues generated from supplying its proprietary products to its existing business model, which relies on providing subcutaneous (SC) formulation conversion technology to global pharmaceutical companies in exchange for upfront fees and milestones.

Alteogen plans to establish an end-to-end system spanning from production to sales by absorbing its subsidiary Alteogen Biologics—which has managed clinical trials, regulatory approvals, and sales—and simultaneously investing in production facilities.

The key product highlighting this progress is the Eylea biosimilar "ALT-L9." Although it has secured approvals in Europe and South Korea, commercial-scale production remains in the preparatory stage. Successfully connecting production contracts and sales partners to actual product supply and revenue expansion has emerged as a central task following the merger.

According to Alteogen on the 13th, its board of directors decided on the 6th to absorb Alteogen Biologics through a small-scale merger. The merger date is scheduled for December 29. The core objective is to combine the parent company's drug development capabilities with the subsidiary's global clinical/regulatory experience and domestic/international sales and marketing organizations.

In the first half of this year, Alteogen's consolidated revenue reached 140,500,000,000 KRW, of which 116,400,000,000 KRW (82.8%) came from technology licensing revenues such as its SC formulation change platform "ALT-B4." This includes technology export upfront fees, milestones, clinical sample supply, and technical service provisions, making technology exports the primary foundation driving Alteogen's growth.

Building on the success of this business, the company plans to secure its next growth engine. Alongside the merger announcement, Alteogen revealed a 200,000,000,000 KRW investment attraction plan, stating that part of the secured funds will be used to construct production facilities, while the remainder will be allocated toward introducing new products and technologies. The strategy is to secure products and production infrastructure with the investment funds and equip the organization for commercialization through the merger.

Achieving this requires not only developing products, but also executing clinical trials, obtaining approvals, and building the capacity to connect production to sales. Alteogen Biologics has carried out global clinical and regulatory procedures for ALT-L9, while also managing sales and marketing for products like Tergazyme and developing follow-up retinal disease treatments. Through the merger, these functions will be centralized into the parent company to facilitate the commercialization of proprietary products.

ALT-L9 is designated as the primary item to gauge the initial success of the merger. This treatment is an Eylea biosimilar used for retinal diseases such as macular degeneration, developed by Alteogen with its subsidiary handling global clinical trials and regulatory approvals. Unlike other pipeline candidates still under development, ALT-L9 has secured approvals in South Korea, Europe, and Saudi Arabia, and is preparing for commercialization.

Revenues based on approvals and sales rights contracts are already being generated. In the first half of this year, ALT-L9-related licensing revenues were approximately 11,500,000,000 KRW, comprising 75,000,000,000 KRW domestically and about 4,000,000,000 KRW overseas. According to the half-yearly report, these were specified as upfront and milestone revenues resulting from sales license agreements.

The next step is to produce and supply commercial-scale quantities and expand the business scale in tandem with local partners' sales. To establish proprietary product operations as a new growth source, product supply and sales revenues must be added to the income already secured through approvals and contracts.

The profitability of the product business also needs to be evaluated. As of the end of June, the book value of ALT-L9's development costs on a consolidated basis stood at approximately 113,200,000,000 KRW. This represents the remaining balance after accounting for expenditures recorded as assets during development and cumulative amortization, which the company stated began following product approval last September.

Development cost amortization is the process of reflecting already spent funds as expenses across the product's useful life. While it does not require additional cash outflow, it affects accounting profits. Going forward, the necessity has grown to secure revenues from increased supply and sales to support production and sales costs alongside development cost amortization.

Alteogen has already established the infrastructure for ALT-L9's production and sales. Last March, it signed a commercial contract worth 6,640,000,000 KRW with contract development and manufacturing organization (CDMO) ST Pharm and STgenBio. In 2021, it also signed a domestic supply and sales contract for ALT-L9 with H림MS, a subsidiary of H림 Pharmaceutical.

Internationally, commercialization and regulatory approvals are being pursued through local partners. Alteogen Biologics previously signed an exclusive contract with Spimaco concerning the production, marketing, distribution, and commercialization of ALT-L9 across 16 countries in the Middle East and North Africa. During Saudi approval, the company presented a direction to pursue additional approvals in major nations such as the United Arab Emirates. However, because not all target countries have secured approval yet, expanding the sales market through additional approvals remains a key task.

Partnerships are also being pursued in the key European market. When announcing European approval last September, Alteogen stated it was advancing partnerships for local commercialization. Even with valid marketing authorizations in the European Union, actual market entry and sales must be executed on a country-by-country basis.

As such, the ALT-L9 business structure relies on collaboration with external companies for production and sales. Even with clinical, regulatory, and sales functions integrated into the parent company via the merger, the roles of existing manufacturing firms and regional sales partners remain crucial. Coordinating production and shipping schedules with ALT-L9 approvals and release dates, alongside expanding sales volume through local partners, is expected to dictate overall business performance.

An Alteogen representative stated, "This merger marks a turning point for Alteogen—which has grown on the basis of its Hybrozyme platform technology for formulation changes—to expand its business domain into the development and commercialization of its own products," adding, "When commercializing future internally developed products, we will reduce the time and burden of building a sales organization from scratch by leveraging already established structures and experience."

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