Alteogen (196170.KQ), the largest company by market capitalization on the KOSDAQ, has approved its transfer listing to the KOSPI. While the stock is likely to rise through the completion of the KOSPI listing, analysts say sustained gains will depend on long-term performance, including royalties from Keytruda SC sales.
The biopharmaceutical company held an extraordinary shareholders' meeting at the Daejeon Convention Center on Wednesday and passed a resolution approving "conditional delisting from KOSDAQ and transfer listing to KOSPI." Alteogen is expected to submit its preliminary KOSPI listing application to the Korea Exchange after March next year. The transfer requires the company to strengthen board governance and the role of outside directors, then obtain approval at a regular shareholders' meeting.
"Additional work is needed to meet the stricter compliance requirements demanded by KOSPI," an Alteogen official said. "We will prepare to complete the KOSPI transfer as soon as possible."
Considering the preliminary review takes approximately 45 business days, Alteogen's final transfer to KOSPI is expected in the second or third quarter of next year. The stock is likely to maintain its upward momentum through next year, as Celltrion's shares surged 160% over approximately six months when it transferred to KOSPI. After Celltrion completed its transfer on February 9, 2018, its stock rose about 36% in one month as KOSPI 200 index-tracking funds flowed in simultaneously. As of Wednesday's closing price, Alteogen's market capitalization stands at approximately 24.5 trillion won ($18.1 billion), ranking 29th on the KOSPI.
However, analysts note that Alteogen must deliver long-term results to maintain any gains from the transfer listing. According to the Korea Exchange, seven of nine companies that transferred from KOSDAQ to KOSPI in the past five years failed to maintain their stock prices at listing levels. Celltrion's stock also exceeded 300,000 won immediately after its transfer but closed at 187,100 won on Wednesday.
The key factor is sales royalties from Keytruda SC, which applies Alteogen's subcutaneous injection formulation technology. The market expects Alteogen to secure additional technology transfer deals based on sustained royalty income. A positive sign is that partner Merck (MSD) has indicated it aims to achieve a 50% conversion rate to the Keytruda SC formulation by 2028.
"We estimate Alteogen's Keytruda-derived royalty revenue at approximately 1.059 trillion won by 2028," said Jung Hee-ryung, a researcher at Kyobo Securities. "Given the strong rationale for improving dosing convenience, avoiding Inflation Reduction Act drug price negotiations, and defending against biosimilar entry, along with patent advantages, we expect continued technology transfer agreements going forward."
