$300 Million Deal for Subcutaneous ADC: Daiichi Sankyo Partners with Alteogen to Develop SC Formulation of Enhertu

On November 9, Daiichi Sankyo and Alteogen Inc., a South Korean biotechnology company, signed a deal worth up to $300 million to jointly develop a subcutaneous (sc) injection formulation of Enhertu, the star HER2 ADC drug co-developed with AstraZeneca.

According to the agreement, Alteogen will receive an upfront payment of $20 million, and if the new formulation of Enhertu (trastuzumab deruxtecan) is launched and sales targets are met, Daiichi Sankyo will pay an additional $280 million.

Enhertu is an ADC therapeutic drug jointly developed by Daiichi Sankyo and AstraZeneca. It was the first to define patients with metastatic HER2-low breast cancer and demonstrated excellent therapeutic effects in clinical trials and practice.

Enhertu has been designated multiple times by the U.S. FDA as a breakthrough therapy for various cancer indications and is rapidly becoming a key growth product for Daiichi Sankyo and AstraZeneca. Sales of the product reached $1.77 billion in the first half of this year, up from $1.16 billion in the same period in 2023. The rapid growth was driven by the expansion of indications in breast cancer, gastric cancer, and non-small cell lung cancer (NSCLC), as well as tissue-agnostic applications for HER2-positive solid tumors.

Unlike many antibody therapies that already have SC formulations, ADC treatments have not yet developed an SC formulation. Therefore, Alteogen is optimistic about the potential expansion of hyaluronidase applications. If this formulation successfully reaches the market, Enhertu is expected to become the first ADC drug administered via subcutaneous injection rather than intravenous infusion. This represents a significant milestone for large-molecule drugs, enabling patients to receive treatment using auto-injectors outside of clinical settings, even at home.

Alteogen is a South Korean biopharmaceutical company focused on the development and commercialization of three types of products: improved long-acting biologics (referred to as Bio-better), ADC drugs, and antibody biosimilars. It also conducts joint research, development, and CMO contract manufacturing with biopharmaceutical companies in China and internationally. Alteogen was founded in 2008 and is listed on KOSDAQ (196170.KQ).

Since its establishment, Alteogen has successfully built three major technology platforms: the long-acting technology NexP™, the ADC technology NexMab™, and the subcutaneous injection technology Hybrozyme™.

Alteogen Explores the Potential of ADC Subcutaneous Formulations by Focusing on the Pharmacokinetic Properties of Hyaluronidase Therapy. Utilizing its proprietary Hybrozyme platform, Alteogen has developed a proprietary recombinant human hyaluronidase, ALT-B4, which enables the conversion of intravenous (iv) drugs to subcutaneous (sc) administration.

This technology utilizes domain swapping of two structurally similar enzymes based on protein engineering, which enhances the conformational flexibility and thermal stability of the target enzyme while maintaining its inherent catalytic mechanism.

It is reported that Alteogen has reached cooperation with four enterprises, including Merck, Intas, and Sandoz, on the ALT-B4 technology, and two products are currently undergoing clinical trials.

The largest deal in terms of transaction value was a licensing agreement reached in February this year between Alteogen and U.S. pharmaceutical giant Merck. Under the terms of the agreement, Merck will obtain the global exclusive license for Alteogen's proprietary recombinant human hyaluronidase ALT-B4 to develop and commercialize a subcutaneous formulation of its PD-1 cancer immunotherapy drug pembrolizumab (Keytruda). Alteogen will receive an upfront payment of $20 million and is eligible for up to $432 million in additional milestone payments, as well as royalties based on product sales (the previous collaboration between the two parties was a non-exclusive license). Dr. Park, CEO of Alteogen, once stated that this collaboration is expected to achieve the largest technology fee income in the history of South Korea's biotechnology industry.

Since reaching a licensing agreement with Merck, Alteogen Inc.'s stock price has continued to soar, increasing the net worth of founder Dr. Park's family and propelling Dr. Park into the billionaire ranks. As of September 25, 2024, the company's market value reached $13.62 billion (nearly 100 billion RMB).

Subcutaneous administration can shorten administration time, reduce medical costs, and improve patient compliance compared to intravenous administration. A large number of antibody drugs for treating autoimmune diseases have adopted subcutaneous administration, and subcutaneous formulations of some anti-tumor monoclonal antibodies such as CD20 and PDL1 antibodies have been gradually approved.

However, there is little research on the subcutaneous administration of ADC drugs. Subcutaneous administration requires high-concentration formulations, which impose stringent demands on the hydrophilicity, stability, and viscosity of the drug. This presents an even greater challenge for ADC drugs, which are inherently composed of three components and have higher hydrophobicity.

Currently, only a few companies globally have mastered the technology of using hyaluronidase to convert intravenous antibody drugs into subcutaneous injection formulations.

Hyaluronidase is a family of enzymes that naturally exist in the body and are often clinically used to hydrolyze hyaluronic acid at the injection site. Hyaluronic acid is present in the subcutaneous space of the human body, acting as a barrier to fluid flow. Hyaluronidase temporarily removes this barrier by locally degrading hyaluronic acid at the injection site, allowing large volumes of fluid to be injected into and dispersed within the subcutaneous space. The hyaluronic acid barrier typically restores itself within 24 hours through normal processes.

This application can be traced back to the 1940s. However, the hyaluronidase used at that time was mainly extracted from animal (bovine or ovine) tissues, which could easily lead to issues such as allergies, immunogenicity, and even zoonotic infectious diseases.

Subcutaneous Drug Delivery Leader Halozyme Therapeutics Solves These Problems with Ease. Founded in 1998, Halozyme is renowned for its Enhanze technology platform, which uses recombinant human hyaluronidase (rHuPH20) to facilitate the dispersion and absorption of subcutaneously injected drugs. Halozyme's technology has been incorporated into multiple marketed products, including the HER2-targeted drugs Herceptin Hylecta and Phesgo, developed in collaboration with Roche.

Facing the same challenge, in comparison, the novel recombinant human hyaluronidase developed by Alteogen maintains the same mechanism of action and enzymatic activity as Halozyme Therapeutic's recombinant human hyaluronidase (rHuPH20), while increasing thermal stability, thereby enhancing protein stability, and improving yield and economic efficiency.

In addition, many MNCs or Biotechs are also attempting to overcome the R&D challenges of subcutaneous injection formulations for large-molecule drugs. For instance, AbbVie is laying the groundwork for subcutaneous administration by improving the stability of ADC drugs under high-concentration conditions through modifications to the linker and payload.

German pharmaceutical company Heidelberg Pharma takes an approach opposite to the current mainstream in payload development by opting for α-amanitin, which is more hydrophilic and highly toxic. At last year’s AACR conference, Heidelberg Pharma presented preclinical studies on subcutaneously administered ADCs. The findings showed that, compared to intravenous administration, subcutaneous administration had a lower maximum plasma concentration (Cmax), a longer half-life, reduced toxicity, and a wider therapeutic window.

The field of subcutaneous administration of ADCs is rapidly evolving. The collaboration between Alteogen and two leading drugs is expected to promote broader cooperation for the recombinant hyaluronidase ALT-B4 and further intensify competition in this area. In the future, with the entry of more companies, advancements in technology, and successful clinical trials, we may see more ADC drugs administered via the subcutaneous route, offering patients more treatment options and improved quality of life.