[Click e-Stock] "One Novartis New Drug Fails Phase 3" Target Price for Alteogen Lowered

Shinhan Investment & Securities recently made a slight downward revision to Alteogen’s target price, adjusting it to 520,000 won just a few days after raising it to 540,000 won.

Alteogen. Yonhap News

On September 9, Shinhan Investment & Securities stated, “Following the Phase 3 failure of Del-desiran, the number of confirmed subcutaneous (SC) conversion items has been reduced from three to two.” Previously, on September 3, immediately after the 4.4 trillion won technology transfer deal with Novartis, Shinhan Investment & Securities had raised Alteogen’s target price from the previous 480,000 won to 540,000 won, based on the calculated SC value of three products.

However, Del-desiran, which is being developed as a treatment for type 1 myotonic dystrophy, failed to meet the primary endpoint in its Phase 3 trial. As a result, Novartis closed the previous day at 277,000 won, a 9.9% decline from the previous session. The stock continued its modest downward trend in the morning of September 9 as well.

Minyong Eom, research analyst at Shinhan Investment & Securities, explained, “Our estimation for SC development candidates included Del-desiran due to its administration as an intravenous injection every 8 weeks over 54 weeks, but future development strategies remain uncertain.” He added, “We are reducing the number of AOC SC conversion candidate items from three to two, excluding Del-desiran.”

However, the two remaining candidates—Del-zota and Del-Brax—are progressing smoothly, so Shinhan Investment & Securities is maintaining its ‘Buy’ investment rating and the view that Alteogen remains its top pick in the sector. Analyst Eom noted, “Del-zota is on track, with approval expected from Novartis in the first half of 2027, and there are no changes in the SC development plan.” He also stated, “Del-Brax is also under development with a target maximum annual sales of up to 4 billion dollars, and our SC development value assessment will continue to reflect these two substances.”

He further projected, “There will be no return of upfront payments or modifications to the existing Novartis contract due to the Del-desiran failure. Looking ahead, the SC development pipeline is estimated to include a total of 10 candidates, covering antibody-drug conjugates (ADCs), bispecific antibodies, and others.”

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