Sales of KRW 119.8 billion and operating profit of KRW 78.9 billion, the highest ever... Overtaking last year's performance in 9 months, Keytruda SC sales expanded, technology exports improved... Secured first milestone of $25 million
Alteogen (196170) increased its operating profit in the third quarter by nearly three times that of a year ago, thanks to the commercialization of the Keytruda subcutaneous injection (SC) formulation and the export of new technology. Quarterly sales exceeded 100 billion won for the first time since the company was founded, and operating profit margin reached 66%.
Alteogen announced on the 3rd that it recorded provisional sales of 119.8 billion won and operating profit of 78.9 billion won in the third quarter on a consolidated basis. There was an increase of 144.4% and 195.8%, respectively, compared to the same period last year. Compared to the previous quarter, sales increased from 68.9 billion won to 119.8 billion won, and operating profit increased from 34.2 billion won to 78.9 billion won.
The operating profit ratio increased by 11.4 percentage points from 54.5% to 65.9% during the same period last year. Compared to 49.6% in the previous quarter, it is 16.3 percentage points higher. While sales increased by 50.9 billion won from the previous quarter, operating profit increased by 44.7 billion won, showing a notable improvement in profitability.
Cumulative sales for the first to third quarters of this year were 260.3 billion won and operating profit was 152.4 billion won. Last year's annual sales of 215.9 billion won and operating profit of 106.9 billion won were both exceeded in just 9 months. Cumulative net profit also increased by 102.8% compared to the same period last year to 143.5 billion won.
#### Keytruda SC sales accelerate... Sales exceeded those of the first half in the third quarter
Hybrozyme, Alteogen's subcutaneous injection formulation conversion technology, contributed to the performance increase. This technology was applied to Keytruda Curex, the SC formulation of Keytruda, an immunotherapy drug sold by Merck (MSD) in the United States.
Keytruda SC's third quarter sales were $830 million, an increase of approximately 79% from $463 million in the previous quarter. The total sales in the first half of the year exceeded $590 million in one quarter, and about 58% of this year's cumulative sales of $1.42 billion occurred in the third quarter.
This is MSD's product sales and is distinct from Alteogen's sales. Alteogen receives technology fees linked to product sales performance according to the technology transfer agreement signed with MSD.
Alteogen secured its first milestone of $25 million (approximately KRW 34.4 billion) from the sale of Keytruda SC. This is the first achievement among sales milestones worth a total of $1 billion included in the contract signed with MSD. This means that profits from actual drug sales have been added to the existing technology fees for each stage of development and approval.
The company explained that this third quarter's performance reflected the inflow of sales milestones resulting from the commercialization of Keytruda SC and the performance of new technology exports. However, since the sales recognition amount for each contract is not disclosed, it is difficult to distinguish the contribution of individual items to overall performance.
#### Contract expanded to include Novartis... Technology exports this year amount to $4.4 billion
New technology exports continued. Last August, Alteogen signed a contract worth up to $365 million with an undisclosed global pharmaceutical company, and in September, it signed a contract with Novartis to develop and commercialize a subcutaneous injection formulation worth up to $3.223 billion.
There were a total of four Hybrozyme technology export contracts signed as of the third quarter of this year, worth up to $4.452 billion. Following MSD's commercialization of Keytruda SC, contracts with new global pharmaceutical companies are expanding, and the number of people applying the technology is also increasing.
The total contract amount includes milestones for each stage of development, licensing, and commercialization. Actual sales recognition varies depending on the performance of each contract, and royalties may be incurred separately after commercialization.
Taeyeon Jeon, CEO of Alteogen, said, "This performance is the result of the commercialization of Hybrozyme platform's partner products and the export of new technologies."
