1. Supply chain resilience (direct impact is small)
- Domestic production base. Alteogen’s first approved product, the recombinant hyaluronidase Tergase, is made in South Korea and was cleared by the MFDS in July 2024. The company’s headquarters and cGMP facilities are in Daejeon, not the Middle East. (biospectator.com, app.biopharmiq.com)
- Indirect cost pressure. A regional conflict can still raise global freight and fuel costs. Even if materials are sourced mostly from the U.S., Europe, or Korea, higher oil prices and disrupted sea-lanes feed through to logistics expenses.
2. Exposure to the Middle-East market (moderate, but sentiment-sensitive)
- In mid-2024 Alteogen’s subsidiary Altos Biologics granted Saudi drug-maker SPIMACO 10-year exclusive rights to market and locally manufacture its Eylea-biosimilar ALT-L9 across 16 MENA countries. A protracted war could delay regulatory reviews, hospital roll-outs, or currency remittances in those territories, making investors uneasy. (argaam.com)
3. Technology-licensing footprint (little direct M-E risk)
- Almost all platform out-licensing deals for ALT-B4 are with U.S., European or Indian pharma groups (Merck/MSD, AstraZeneca-MedImmune, Daiichi Sankyo, Intas, etc.), not Middle-Eastern firms. (prnewswire.com, bioworld.com)
- Therefore no active R&D programs would be halted by a Middle-East conflict, but future partnership talks with Gulf sovereign funds or regional biotechs might be postponed.
4. Market-wide risk-off moves hit Korean biotech hardest
- When the Israel-Hamas fighting escalated in October 2024, the KOSDAQ biotechnology index fell sharply; Alteogen dropped 3.47 % in one session, despite no company-specific news. Investors rotated into defence and energy names while trimming high-beta growth stocks. (businesspost.co.kr)
5. Oil-price spike feeds into inflation and valuation pressure
- On 3 Oct 2024 Brent crude jumped 5 % as global equities slipped on fears the conflict would spread and threaten energy infrastructure. Higher oil keeps global inflation sticky, postpones rate-cuts and lifts the discount rate applied to long-duration cash-flows — exactly the profile of pre-profit biotechs like Alteogen. (reuters.com)
6. Compounding company-specific overhangs
| Issue | How it amplifies downside |
|---|---|
| RCPS issuance talk | Press-reports about a ₩2 trn redeemable-convertible-preferred-share deal raised dilution worries before management clarified that nothing was final. (seoulfn.com) |
| Halozyme patent-dispute rumour | Korean media circulated notes suggesting Halozyme could sue over ALT-B4-like technology; even the possibility of lower royalty streams spurred profit-taking. (pharm.edaily.co.kr) |
7. Putting it together
| Vector | Direct operational risk | Sentiment / valuation drag |
|---|---|---|
| Supply chain | Low | Mild (cost inflation) |
| Middle-East sales (ALT-L9) | Moderate (launch delay) | Moderate |
| Licensing pipeline | Very low | Low |
| Market-wide geopolitics | — | High (risk-off, sector rotation) |
| Oil/interest-rate channel | — | High (higher discount rate) |
| RCPS & patent talk | — | Company-specific, can magnify any external shock |