Korean Biotech’s Shares Quadruple In Seven Months, Becomes Kosdaq’s Biggest Stock
by John Kang · ForbesShares of Alteogen, a little-known biotech company in South Korea, have quadrupled since late February, and now boasts a market capitalization of 18.6 trillion won (about $14 billion). The stock surge has boosted the net worth of the company’s billionaire CEO Park Soon-jae to $2.7 billion, according to Forbes’ Real-Time Billionaires list, up from $1.2 billion seven months ago.
Alteogen is now the largest corporation to be listed on South Korea’s technology-rich Kosdaq stock exchange, pipping EcoPro BM, the battery-materials-making unit of billionaire Lee Dong-chae’s chemicals group EcoPro, for the title.
Based in Daejeon, south of Seoul, Alteogen focuses on biosimilars, which are cheaper versions of brand-name drugs made from living cells, and biobetters, an improved (safer and more effective) version of existing drugs. In recent years, Alteogen has been making more money from ALT-B4, a technology that allows drugs to be administered subcutaneously (into the fatty layer of skin cells) instead of intravenously (into the veins).
Park, 69, first joined the three-comma-club in February when its shares jumped about 25% after it announced a licensing deal with drug giant Merck. The licensing deal with Merck is for the rights to use Alteogen’s ALT-B4 for the U.S. drug giant’s cancer immunotherapy pembrolizumab. The therapy, better known as Keytruda, is the world’s top-selling drug and its main patent expires in 2028. Under the deal, Alteogen will receive $20 million upfront and potential milestone payments of as much as $432 million.
Alteogen shares have steadily risen since the Merck deal. “The U.S. government’s policy measures to lower drug prices in accordance with the Inflation Reduction Act and expansion of the biosimilar market are driving the need for big pharmas to develop subcutaneous (SC) versions of their original drugs, as well as the need for biosimilar companies to seek differentiation in strategies,” analysts at Shinhan Securities said in a research note in July.
“Adding to the signing of an exclusive contract with Merck, expansion of the out-licensing deal with Sandoz clearly shows that Alteogen has the business structure to benefit from U.S. policy direction,” the analysts added.
In July, Alteogen revised a deal with Sandoz, the generics-and-biosimilars division of Swiss drug giant Novartis. The original deal, signed in December 2022, allowed Alteogen to receive milestone payments of up to 184 billion won for licensing its ALT-B4 technology to develop subcutaneous versions of up to three substances. “The revised contract between the two likely expanded the total to four or five substances, with milestones estimated at 800 billion won to 1 trillion won aside from royalties,” the Shinhan analysts said in the note. And instead of using ALT-B4 technology, the revised deal is for Alteogen’s new technology using hyaluronidase enzyme—it’s the same enzyme linked with the sperm’s ability to dissolve the layers of cells and mucus that surround the egg.
And last week, Alteogen announced that it has applied for approval of a drug called EYZANFY as a treatment for wet age-related macular degeneration (AMD), a leading cause of vision loss in the elderly, in South Korea.
In 2008, Park founded Alteogen with his wife, who served as the company’s chief strategy officer and holds a Ph.D. in biochemistry from Purdue University. The company listed on the Kosdaq in 2014. Park, who also holds a doctorate in biochemistry from Purdue University, previously worked at LG Life Sciences and Hanwha Petrochemical, and was a postdoctoral researcher at the Massachusetts Institute of Technology.
To be sure, South Korea’s biotech industry has minted a string of new billionaires who could only hold their status for a limited time before tumbling out of the three-comma club when their fortunes faltered. Last year, Chung Yong-ji debuted on the list of Korea’s 50 Richest after shares of his Caregen, which claimed one of its powdered supplements helps with diabetes and weight loss, almost quintupled from 2022 to 2023. Chung lost his billionaire status after Cargen’s shares slumped 60% in six months. In 2021, Cho Young-sik followed a similar trajectory after he took his Covid-19 test maker, SD Biosensor, public on the Kosdaq that year, but fell off the billionaire ranks in 2023 as investors turned away from the pandemic-fueled stock.
Still, there are success stories. Billionaire Seo Jung-jin, who cofounded drugmaker Celltrion in 2002, topped the Korea wealth rankings in 2021 with a net worth of $12.5 billion. Seo was ranked third in the most recent rankings with a fortune of $5.7 billion.