MSD reports 79% surge in Q3 Keytruda SC sales as U.S. subcutaneous adoption accelerates.
Alteogen secures 34.4 billion won in initial sales milestones; full-year projections reach up to 350 billion won.
Alteogen (196170.KS) is beginning to see its technology licensing successes translate into substantial commercial revenue. The company’s proprietary subcutaneous (SC) delivery technology, licensed to MSD (Merck & Co.), is now being deployed in the subcutaneous version of the global blockbuster oncology drug, Keytruda. Following the receipt of an initial sales milestone of 34.4 billion won in August, the company is now positioned to capture up to $1 billion in total sales milestones, alongside a steady stream of annual royalties reaching hundreds of billions of won.
In its Q3 earnings report released on the 29th (local time), MSD disclosed that sales of Keytruda SC (marketed as Keytruda Hyfiece) reached $830 million. This represents a 79% increase from the previous quarter, pushing the quarterly figure past the 1 trillion won mark—an impressive growth rate that has already surpassed the total sales generated in the first half of the year.
Keytruda SC Gains 10% Market Share; U.S. Expansion Accelerates
Keytruda SC was developed to allow for subcutaneous administration, offering a significant reduction in infusion time compared to the traditional intravenous (IV) method, a feature that is rapidly driving market adoption in the United States.
As of the third quarter, SC formulations accounted for approximately 10% of the total Keytruda product portfolio sales. While sales of the traditional IV formulation saw a 5% year-on-year decline, the rapid growth of the SC version effectively offset this, contributing to a 6% overall increase in the Keytruda franchise.
The trend is even more pronounced in the U.S. market. According to data released by Alteogen on the 30th, Keytruda SC accounted for an estimated 15.8% of Keytruda sales in the U.S. during September. MSD maintains its goal of converting 30–40% of its U.S. patient base to the SC formulation by the end of 2027.
The geographical reach is also expanding. Supply of Keytruda SC began in South Korea in October, and the product has received regulatory approval in China and Japan. While legal patent disputes have temporarily restricted sales in some European countries, Alteogen estimates that these eight affected nations represent only 6–8% of total global Keytruda revenue.
During the Q3 earnings call on the 29th, MSD CEO Robert Davis expressed confidence in the intellectual property underlying Keytruda SC, noting that the European injunctions do not represent a final legal judgment and emphasizing that the impact on overall SC sales remains limited.
Initial 34.4 Billion Won Secured; 2024 Milestones Projected to Reach 350 Billion Won
Alteogen’s revenue model consists of two phases: potential sales milestones totaling up to $1 billion, followed by a 2% royalty on net sales of Keytruda SC once all conditions are met.
On August 31, Alteogen announced it had met the conditions for its first sales milestone of $25 million (approximately 34.4 billion won at the time), which has since been collected. The company remains eligible for further milestone payments as the product hits pre-defined sales targets.
Brokerage houses have projected total sales milestones for this year to range between 270 billion and 350 billion won. IBK Securities estimated 270 billion won, while Samsung Securities projected up to 350 billion won. The Q3 surge suggests these forecasts are becoming a reality, with future payments contingent upon ongoing sales performance.
Long-term expectations remain high. In a September report, IBK Securities projected that if all milestones are paid by 2028, annual royalties by 2030 could reach $460 million (approximately 644 billion won based on exchange rates at the time of the report). This assumes a continued rise in U.S. adoption and expansion into international markets, providing Alteogen with a consistent, recurring revenue stream decoupled from the need for additional licensing deals.
With the third-quarter results confirming a clear upward trajectory, the pace of U.S. conversion and the expansion of Asian markets will serve as key indicators for the timing and scale of future milestones and long-term royalty inflows for Alteogen.
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