A drug does not become more valuable only by becoming more powerful. Sometimes, changing how it is delivered can create an entirely new commercial opportunity.
That is what is happening in the race to convert biologic medicines from intravenous, or IV, infusions into subcutaneous, or SC, injections.
The latest signal came on September 2, when Novartis signed an agreement with South Korean biotechnology company Alteogen for access to its ALT-B4 drug-delivery technology. The agreement could be worth up to $3.223 billion, plus royalties, if options are exercised and development and commercial milestones are achieved.
The deal is Alteogen’s fourth major ALT-B4 transaction announced in 2026. The reported maximum potential value of its four 2026 deals now stands at approximately $4.45 billion.
That number is striking. But the bigger story is what sits behind it.
The technology used to turn an IV biologic into an injection under the skin is becoming a valuable licensing asset. At the same time, competing hyaluronidase technologies are becoming the subject of patent disputes.
In other words, the delivery layer is becoming an IP battleground of its own.
Why pharmaceutical companies want subcutaneous versions
Many biologic medicines are given through IV infusion because large molecules are difficult to deliver in large quantities under the skin.
Hyaluronidase offers one solution.
The enzyme temporarily breaks down hyaluronan, a component of the extracellular matrix beneath the skin. This can create space for a larger volume of medicine to disperse, helping make subcutaneous administration possible.
The commercial attraction is obvious.
An IV treatment can require a healthcare facility and a lengthy infusion. A subcutaneous injection can potentially take only minutes, or even less.
Merck’s Keytruda Qlex, for example, can be administered subcutaneously in as little as one minute, compared with approximately 30 minutes for the traditional IV infusion. The FDA approved Keytruda Qlex in September 2025 for the relevant approved solid-tumor indications of pembrolizumab.
This is not simply about convenience.
For pharmaceutical companies, changing the route of administration can also support product differentiation, lifecycle management and new intellectual-property strategies.
The $3.223 billion signal
The Novartis-Alteogen agreement provides the clearest indication yet of the commercial value being assigned to these platforms.
The Novartis number needs an important qualification: $3.223 billion is the maximum potential value, not an upfront payment. It includes option exercise fees and development and commercial milestones, alongside royalties on net sales.
That distinction aside, the transaction is significant because Novartis is effectively buying access to a platform that can potentially be used across multiple biologic products.
And this is not Alteogen’s first major deal.
Alteogen’s platform is attracting multiple pharma companies
In 2026, Alteogen has announced agreements involving GSK/Tesaro, Biogen, another undisclosed pharmaceutical company and now Novartis.
The reported maximum potential values of the first three 2026 agreements were approximately:
- $285 million with GSK/Tesaro
- $579 million with Biogen
- $365 million with an undisclosed pharmaceutical company
With the Novartis agreement added, the total reaches approximately $4.45 billion in maximum potential deal value.
The pattern is important.
These are not simply companies buying a single formulation. They are licensing access to a technology that can potentially be applied to multiple products.
That makes the underlying patent estate strategically important.
Halozyme built the commercial model first
Alteogen is entering a market in which Halozyme has already established a substantial commercial position.
Halozyme’s ENHANZE platform uses recombinant human hyaluronidase PH20 to facilitate subcutaneous delivery of biologics.
The financial results show how valuable that platform has become.
Halozyme reported $1.397 billion in total revenue in 2025, including approximately $868 million in royalty revenue. Total revenue increased 38% year over year, while royalty revenue increased 52%.
This is an important distinction. Halozyme does not need to discover every drug that uses its technology. Its partners develop and commercialize the medicines, while Halozyme can earn royalties from the resulting products. That turns drug-delivery IP into a potentially long-term revenue stream. And it creates a powerful incentive to protect that IP.
Keytruda shows what is at stake
The most visible example is Merck’s Keytruda.
The FDA approved Keytruda Qlex in September 2025. It combines pembrolizumab with berahyaluronidase alfa, enabling subcutaneous administration.
The product is already generating substantial revenue.
Merck reported approximately $128 million in Keytruda Qlex sales in the first quarter of 2026. First-half sales reached approximately $590 million.
That gives the delivery technology a very different economic significance.
It is no longer just a formulation improvement.
A successful SC version of a blockbuster biologic can itself become a major commercial product.
And that is precisely where the patent conflict begins.
The patent fight: Merck versus Halozyme
Halozyme has alleged that Merck’s subcutaneous pembrolizumab product infringes patents covering its MDASE technology, which relates to modified human PH20 hyaluronidase.
The dispute has been fought on multiple fronts.
Halozyme sued Merck in the U.S. District Court for the District of New Jersey, asserting infringement of 15 patents.
Merck, meanwhile, challenged Halozyme’s patents before the U.S. Patent Trial and Appeal Board, arguing that certain claims should not survive validity scrutiny.
This is not a theoretical dispute.
In May 2026, the PTAB issued a final written decision finding the challenged claims of Halozyme’s U.S. Patent No. 11,952,600 unpatentable. The decision concerned issues including written description and enablement.
But that did not resolve the entire dispute.
Other patents and proceedings remain in play.
The case has also extended into Europe, including litigation involving Halozyme patents covering modified PH20 technology and proceedings concerning Merck’s use of Alteogen’s ALT-B4.
A German court previously issued a preliminary injunction affecting sales of subcutaneous Keytruda, while proceedings have also taken place in the UK and Netherlands.
The result is a complicated IP picture:
Merck’s product uses Alteogen’s ALT-B4, while Halozyme argues that aspects of the technology used in that product fall within its patent rights.
That makes the dispute particularly relevant to the emerging competition between delivery platforms.
This is bigger than one patent
The important lesson for pharmaceutical companies is that an SC conversion project can trigger several different layers of IP analysis.
A company may need to examine patents covering:
- the hyaluronidase enzyme itself;
- modified enzyme sequences;
- formulations;
- excipients and stability;
- combinations of the enzyme with a particular biologic;
- methods of subcutaneous administration;
- manufacturing processes;
- delivery devices;
- and therapeutic uses.
The result is a much more complicated freedom-to-operate question.
Instead of asking only:
“Do we have the right to make this biologic?”
companies increasingly need to ask:
“Can we legally make and sell this specific subcutaneous version in each market?”
The Merck–Halozyme dispute is a real-world example of why that question matters.
The commercial prize is already large
The growth of SC formulations is occurring against a backdrop of enormous spending on biologics.
A peer-reviewed analysis found that biologics with approved or investigational hyaluronidase versions accounted for approximately $10.3 billion in Medicare spending in 2022.
The study identified at least nine biologics with approved or investigational hyaluronidase versions as of December 2024. For four drugs examined, the SC/hyaluronidase versions represented between 5% and 83% of Medicare spending on those products.
The point is not that hyaluronidase technology caused all of that spending.
Rather, the data show the size of the commercial products sitting behind the delivery-platform race.
When a biologic generates billions in annual revenue, even a narrow patent covering an important delivery component can become strategically significant.
The next race: beyond antibodies
The technology is also moving into more complicated biologics.
Researchers and companies are investigating hyaluronidase-enabled subcutaneous delivery for antibody-drug conjugates, or ADCs, among other modalities.
That matters for IP because the patent landscape can expand with the technology.
Future claims could potentially focus not only on the enzyme, but also on:
enzyme + drug + formulation + administration method.
Alteogen’s patent activity already includes work involving hyaluronidase-enabled subcutaneous formulations with ADCs, while Halozyme continues to develop patent protection around PH20 variants, formulations and combination approaches.
The competitive landscape is therefore evolving from protecting a delivery enzyme to protecting an entire delivery architecture.
What the Novartis deal really tells us
The Novartis agreement should therefore be viewed as more than another billion-dollar pharmaceutical licensing deal.
It shows that pharmaceutical companies are willing to place significant economic value on the technology that changes how a biologic reaches the patient.
The sequence is becoming clear:
IV biologic → SC conversion → differentiated product → new commercial opportunity → new IP questions.
Halozyme has already demonstrated that the model can produce substantial royalty revenue.
Alteogen is showing that there is room for a competing platform, with approximately $4.45 billion in maximum potential 2026 licensing deals.
And the Merck–Halozyme litigation demonstrates what happens when these platforms meet commercially important products and overlapping patent claims.
The emerging competition is therefore not simply about making injections faster.
It is about who controls the technology, who has freedom to operate, who owns the relevant patents and who can license the right to use them at scale.
For pharmaceutical companies developing the next generation of biologics, SC conversion may soon need to be treated as an IP strategy from the beginning, not as a formulation decision made near the end of development.
The next biologics patent battle may not be over the drug itself. It may be over the technology that gets the drug under the skin.
SOURCES:
- https://www.reuters.com/legal/litigation/novartis-signs-deal-worth-up-32-billion-alteogens-drug-delivery-technology-2026-09-02/
- https://www.alteogen.com/en/sub/ir/news.php?bid=13&idx=359&mode=view&page=1
- https://www.astrazeneca.com/media-centre/press-releases/2025/astrazeneca-enters-license-agreement-with-alteogen-for-subcutaneous-formulations-of-multiple-oncology-assets.html
- https://www.sec.gov/Archives/edgar/data/1159036/000115903626000024/halo-20251231.htm
- https://www.fda.gov/drugs/resources-information-approved-drugs/fda-approves-pembrolizumab-and-berahyaluronidase-alfa-pmph-subcutaneous-injection
- https://www.sec.gov/Archives/edgar/data/310158/000110465926090045/tm2621496d1_ex99-2.htm
- https://www.sec.gov/Archives/edgar/data/310158/000031015826000212/R15.htm
- https://www.bailii.org/ew/cases/EWHC/Patents/2026/1838.html
- https://www.pearceip.law/2026/05/12/msd-invalidates-us-halozyme-patent-in-sc-pembrolizumab-dispute/
- https://pmc.ncbi.nlm.nih.gov/articles/PMC12166118/
- https://pmc.ncbi.nlm.nih.gov/articles/PMC6394283/
- https://academic.oup.com/abt/article/9/3/395/8700359
- https://www.alteogen.com/en/sub/technology/achievement.php?s_cate=patent
