Alteogen, a biotech firm, said it has successfully concluded a deal to make profits out of its own platform technology.
The company said Friday it signed a non-exclusive global license agreement with one of the top 10 pharmaceutical companies for the human hyaluronidase (ALT-B4) platform technology. Under the agreement, Alteogen will provide ALT-B4, and the partner company will develop and commercialize a subcutaneous (SC) injection drug by applying the technology to its pipeline.
Alteogen will receive $130 million in an upfront payment, which the company has no obligation to return, within 30 business days of the contract. The amount is more than Alteogen's annual sales of 13.7 billion won ($11.6 million) last year. If the partner company wins the license and rolls out a product, Alteogen will receive a milestone payment. The payment could go up to $1.37 billion if the partner firm reaches its target sales.
Alteogen’s ALT-B4 can replace intravenous (IV) formulations with subcutaneous injection (SC) formulations. In July, the company became the world’s second to develop platform technology. A platform developer can expect additional licensing deals and receive royalties from multiple pharmaceutical firms.
Halozyme Therapeutics, a U.S. firm that developed an advanced technology first and dominated the market, is known to receive more than 300 billion won in royalties a year based on contracts with multiple drugmakers for applying the technology to more than 50 drugs.
Three medicines obtained the nod from the U.S. FDA by using Halozyme Therapeutics’ technology in the first half of 2019. Halozyme expects that its annual revenue will reach $1 billion by 2027.
Alteogen is known to be discussing licensing-out deals with other companies, too.
Alteogen’s SC formulation technology also offers a rosy outlook. Unlike IV injections that patients should visit the hospital to get them, SC injections can be administered at home. Original drug companies are increasingly choosing to change drug formulations.
Among antibody drugs that won FDA approval, SC injections took up 33 percent in 2018, up from 20 percent in 2014. In the first half this year, SC injections accounted for 40 percent.
Only Halozyme and Alteogen have developed a drug delivery technology that replaces IV formulations with SC formulations. As Halozyme grew rapidly, anticipation for Alteogen is also high.
Jin Hong-gook, an analyst at Korea Investment & Securities, said in May that even though it was difficult to directly compare Alteogen with Halozyme, which is already conducting many trials, Alteogen’s value will rapidly rise if the company’s direction of the SC formulation business becomes visible.
Besides ALT-B4, Alteogen has NexMab antibody-drug conjugate (ADC) technology, which connects a drug to an antibody to enhance therapeutic effects, and NexP technology, which combines a protein with a drug to prolong the drug’s activity.