Alteogen to absorb biologics unit in all-stock merger

Alteogen said Tuesday it will absorb its affiliate Alteogen Biologics in a small-scale merger, folding scattered pipelines and commercialization capabilities into a single operation.

The Kosdaq-listed company will issue 600,477 common shares to the affiliate's minority shareholders at a merger ratio of 0.17. It already owns 62.9 percent of Alteogen Biologics, and no new shares will be issued for its own stake.

The merger is scheduled to close on Dec. 29, with a shareholders' meeting set for Nov. 27 and the creditor objection period ending Dec. 28.

Alteogen Biologics holds a pipeline that includes the biosimilar ALT-L9, which has completed global Phase 3 trials and won European approval, its macular degeneration treatment candidate ALTS-OP01, and sales and marketing operations for the drug Teragaze.

The company said the deal will let it internalize the affiliate's domestic and overseas sales and marketing staff and know-how, reducing the time and burden of building a sales organization from scratch when it commercializes its own products. It said the merger will consolidate pipelines and business capabilities scattered across the subsidiary and strengthen a system that runs from research and development through commercialization.

"This merger is a turning point for Alteogen, which has grown on its Hybrozyme platform, to expand its business into the development and commercialization of its own products," a company official said.

The merger values Alteogen at 261,345 won per share and Alteogen Biologics at 43,895 won per share.