Shinhan Securities cut its target price for Alteogen (196170) to 520,000 won from 540,000 won after one of three antibody-oligonucleotide conjugate (AOC) drug candidates Novartis had been developing failed in a Phase 3 trial.
Eom Min-yong, an analyst at Shinhan Securities, lowered the target price on the 9th and said the firm had assumed deldesiran was a candidate for subcutaneous (SC) development based on its dosing regimen of intravenous (IV) administration every eight weeks over 54 weeks, but that the development strategy going forward has become uncertain. "The number of AOC pipeline products expected to be converted to SC has narrowed to two from three," the analyst said. Shinhan maintained its "buy" rating, saying Novartis' Phase 3 failure does not change its technology transfer agreement with Alteogen.
Alteogen signed a technology transfer agreement with Novartis on the 2nd of this month worth up to 4.416 trillion won ($3.2 billion) for SC formulation conversion using its human hyaluronidase ALT-B4. The market expects the deal to expand the scope of ALT-B4 applications into ribonucleic acid (RNA) fields, including AOCs.
The trial failure, however, is not seen as undermining the broader existing agreement between Alteogen and Novartis, as commercialization timelines for Novartis' remaining AOC pipeline remain on track. Eom and other analysts said delzota, for which U.S. Food and Drug Administration (FDA) approval has been filed, is on course for approval in the first half of 2027 with no change to its SC development plan. "Delbrax is also being developed with a target of up to $4 billion in sales, so the value of SC development for the two AOC compounds continues to be reflected," they said.
"There will be no return of upfront payments or reduction or modification of the existing agreement as a result of this deldesiran Phase 3 failure," they said. "Our estimate of SC development options for a total of 10 products, including antibody-drug conjugates (ADCs) and bispecific antibodies, is maintained, and these are expected to shift to other AOCs."
