Hyung In-woo and related parties acquire 27,000 additional shares over two days
Stock plunges on U.S. drug pricing concerns; Shinhan Securities notes limited impact on Keytruda SC
Alteogen (196170) shares plummeted on the 9th due to concerns that U.S. drug price reduction policies could diminish royalty revenues from the cancer treatment 'Keytruda SC.' As the stock showed signs of a rebound on the 10th, it was revealed that the second-largest shareholder, Hyung In-woo, CEO of Smart & Growth, along with related parties, purchased approximately 4.6 billion won worth of shares over two days. CEO Hyung stated that he initiated the purchase because he deemed the recent decline excessive.
27,000 shares acquired immediately following the plunge; 4.6 billion won invested
According to purchase records provided by CEO Hyung on the 10th, he acquired 12,000 shares of Alteogen on the 9th at an average price of 167,978 won, followed by an additional 10,000 shares on the 10th at an average of 174,431 won.
A related party, Yeom Hye-yoon, also purchased 5,000 shares during the same period: 2,000 shares on the 9th at an average of 167,184 won and 3,000 shares on the 10th at an average of 175,017 won.
The total number of shares purchased by the two individuals over the two days is 27,000. The total investment amounted to 4.619 billion won, with a weighted average purchase price of approximately 171,091 won.
CEO Hyung stated, "I decided to purchase additional Alteogen shares because I believe the recent price drop is excessive," adding, "I hope this helps in some small way toward the recovery of the stock price."
CEO Hyung has previously increased his stake in Alteogen and has consistently urged management to improve shareholder communication and returns. This time, he stepped in as investor sentiment soured due to changes in U.S. drug price negotiation regulations, demonstrating his conviction that the market overreacted.
Shinhan Securities: "Impact of price cuts is limited"; Target price set at 430,000 won
The backdrop for Alteogen's sharp decline is the final rule on U.S. Medicare drug price negotiations finalized on the 5th. As the U.S. government decided to bundle subcutaneous (SC) and intravenous (IV) formulations for negotiation eligibility, the likelihood that MSD's Keytruda SC will be included in price reduction targets has increased.
Alteogen provides subcutaneous conversion technology to MSD and receives royalties from Keytruda SC sales. While lower drug prices could impact royalty revenue, the actual reduction depends on sales volume and contract terms. The targets for price negotiations will be selected in 2027, with reduced prices potentially taking effect in 2029.
In a report titled "Drug Price Cuts are a Matter of Perspective" released on the 10th, Shinhan Securities analyzed that the impact of price cuts on Keytruda SC would be limited.
Shinhan Securities estimated that Keytruda SC's share of Medicare revenue is approximately 5-6% of total sales. Noting that MSD's stock price, which is directly affected by price cuts, fell only 0.13% despite the news, the firm assessed that Alteogen's recent decline was excessive.
Although the target price was lowered to 430,000 won due to adjustments in the perpetual growth rate used for corporate valuation, the firm maintained its "top pick" status for the stock within the sector. It also maintained its positive outlook on the expansion of Keytruda SC sales and the potential for new technology exports.
Shinhan Securities projected that even if Keytruda is included in the 2027 price negotiation list, the impact on revenue will be limited when considering the expected expansion of Keytruda SC sales. Future profitability will depend on the negotiation outcomes and the growth rate of subcutaneous formulation sales.
