Alteogen (196170.KQ) posted record annual results for 2024, with revenue of 202.1 billion won ($145 million) and operating profit of 114.8 billion won on a standalone basis, the company said in a regulatory filing Sunday.
The record performance came as royalty income from "Keytruda Qrex," a blockbuster drug featuring Alteogen's subcutaneous (SC) formulation technology, began to materialize. Industry observers say the results mark Alteogen's emergence as Korea's first "profit-generating biotech company."
Revenue jumped 117% year-on-year while operating profit soared 275%. The operating margin rose from 33% to 57%. Compared to revenue of 8.7 billion won in 2022, the figure represents a 23.2-fold increase, and a 2.4-fold increase from 835 billion won in 2023.
The earnings reflected income from technology export contracts for the ALT-B4 subcutaneous formulation platform, including upfront payments from AstraZeneca and milestone payments for Keytruda Qrex's approvals in the United States and Europe. Sales royalties from "Ankota," a Herceptin biosimilar marketed by Chinese partner Qilu Pharmaceutical, and ALT-B4 supply revenue also contributed.
Alteogen expects its subcutaneous formulation market share to expand with the J-code assignment for Keytruda Qrex, set to take effect in April. The J-code, managed by the U.S. Centers for Medicare and Medicaid Services (CMS), simplifies insurance billing procedures, making it easier for hospitals and clinics previously prescribing Keytruda to switch to Keytruda Qrex. Increased prescriptions could accelerate sales-linked milestone payments to Alteogen.
The company has now become the first Korean biotech firm to demonstrate a stable revenue structure based on drug sales. Beyond Keytruda Qrex, Alteogen's internally developed product "Tergaze Ju" is expanding prescriptions in its early market entry phase. Including Qilu's Ankota, the company has commercialized three products. "Ailuxi B," an Eylea biosimilar developed by Alteogen, received marketing authorization from the European Commission in the second half of last year and is expected to be commercialized this year. Alteogen has set a mid-to-long-term goal of commercializing nine products by 2030, including proprietary and licensed products.
The company said technology transfer discussions with potential partners are expanding, as the commercialization of Keytruda Qrex has proven its technology and safety profile. Industry observers view this year's first contract with a GlaxoSmithKline (GSK) subsidiary as a signal that the global shift toward subcutaneous formulations is gaining momentum.
Alteogen plans to implement shareholder returns this year, primarily through cash dividends along with other methods such as bonus share issuances. "We have focused on R&D and raised investment capital, but now we have entered a stage where we generate actual profits and share results with shareholders," a company official said.
"The strategic significance lies in the continued accumulation of global big pharma references rather than contract size," said Lee Ji-soo, an analyst at Daol Investment & Securities. "Demand for subcutaneous formulation conversion is expanding in drug categories requiring high doses and repeated administration, such as immuno-oncology drugs and antibody-drug conjugates (ADCs). Reduced administration time and improved patient convenience are emerging as increasingly important competitive factors."
"Following the commercialization of Keytruda Qrex last year, we will see more visible results this year through sales milestone recognition," CEO Jeon Tae-yeon said. "From a long-term perspective, we will continue making strategic decisions that add new elements to corporate value, including investment decisions for production facilities to stabilize the global supply chain and open innovation initiatives."