AstraZeneca Inks $1.35B Deal with Alteogen for Subcutaneous Cancer Drugs Amid Patent Controversy

AstraZeneca has entered into a significant partnership with South Korean biotechnology company Alteogen, securing exclusive rights to develop subcutaneous formulations of several oncology assets. The deal, worth up to $1.35 billion, comes despite ongoing patent disputes in the hyaluronidase enzyme space.

Deal Structure and Financial Details

AstraZeneca's agreement with Alteogen comprises two separate contracts totaling $1.35 billion. The first deal includes a $25 million upfront payment with potential milestone payments of up to $725 million. The second agreement involves a $20 million upfront payment and up to $580 million in milestones. While AstraZeneca has not disclosed specific assets involved, the collaboration centers on Alteogen's hyaluronidase protein, ALT-B4, which enables large-volume subcutaneous administration of drugs typically given intravenously.

Patent Controversy and Industry Implications

The AstraZeneca-Alteogen partnership unfolds against the backdrop of a heated patent dispute involving Halozyme Therapeutics, a U.S. drug delivery specialist. Halozyme has threatened legal action against Merck & Co. over its subcutaneous version of Keytruda, which utilizes Alteogen's ALT-B4 technology. Halozyme argues that ALT-B4 infringes on its Mdase portfolio of modified hyaluronidases.

This patent clash has broader implications for the pharmaceutical industry, potentially affecting other companies pursuing subcutaneous formulations of existing drugs. Merck plans to launch its subcutaneous Keytruda in the U.S. this year, pending FDA approval, while simultaneously challenging seven of Halozyme's approximately 100 Mdase patents at the U.S. Patent and Trademark Office.

Industry analysts, including Umer Raffat from Evercore ISI, suggest that a settlement between Merck and Halozyme is likely. Raffat notes that while Halozyme's patents are broad, covering "every peptide which has 95% sequence identity to a modified hyaluronidase PH20 peptide," such expansive claims may be vulnerable to legal challenges, similar to the 2023 U.S. Supreme Court decision against Amgen's broad PCSK9 patent claims.

Industry Trend Towards Subcutaneous Formulations

The AstraZeneca-Alteogen deal highlights a growing industry trend towards developing subcutaneous versions of established intravenous drugs. This shift is driven by the potential for improved patient convenience and reduced healthcare system burden. Other recent collaborations in this space include Daiichi Sankyo's partnership with Alteogen to develop a subcutaneous version of its antibody-drug conjugate Enhertu, which is co-developed with AstraZeneca.

The pharmaceutical industry's pursuit of subcutaneous formulations, particularly in oncology, signals a strategic focus on enhancing drug delivery methods and patient experience. However, as evidenced by the ongoing patent disputes, this area of innovation also presents complex intellectual property challenges that companies must navigate carefully.