[THE INVESTOR] South Korean biotech company Seegene plans to make an aggressive push into the US and European markets by launching hundreds of molecular diagnostic assays enabling early detection of various diseases from flu to cancer on a single platform from next year.
Seegene, a developer of multiplex molecular technologies, is set to implement a breakthrough technology -- an automation of reagent development system to reduce development time significantly from a year to weeks.
“Molecular tests allow timely and accurate detection of diseases but the high cost tests have been the biggest obstacle for its vitalization,” Chun Jong-yoon, founder and CEO of Seegene, said in an interview with The Investor on Dec. 6.
Seegene founder and CEO Chun Jong-yoon
Take the Middle East respiratory syndrome outbreak in South Korea that killed dozens in 2015 as an example, it takes roughly 150,000 won (US$128) to conduct a molecular test to identify the single virus.
Although less than 1 percent of people visiting hospitals conduct such tests due to low availability and higher cost than conventional diagnostic methods, molecular test is increasingly becoming a key segment in vitro diagnostics amid growing awareness among people and improving health care infrastructure.
Chun expects that Seegen will develop over 300 reagent products in the next two years with the automation system based on its silico database containing the firm’s 15 years of experience and studies.
“With this innovative approach, Seegene will unveil a ‘one platform solution’ in which almost every molecular diagnostic test can be done with a single equipment,” the CEO said.
Compared with global companies specialized in the field, including Roche Diagnostics, Novartis and Abbott, Seegene is a small company in terms of size and low brand awareness. It is the 19th-largest company among KOSDAQ-listed firms with a market capitalization of 867 billion won (US$742.67 million).
But Chun has decided to focus on what’s in his control.
“While global heavyweights like Roche have been investing a large sum of money on developing easy-to-use diagnostic equipment, I thought that’s not the key point of this competition. I choose to improve assay technology,” Chun said.
Offering more reagents that can be managed on a single platform will be an attractive option for both hospitals and patients who hesitate to opt for molecular tests over traditional diagnostics due to high costs.
Seegene has already taken the first step toward the single-platform solution by introducing Allplex assays, using the next-generation polymerase chain reaction, last year.
Allplex reagents are designed to detect and identify 26 pathogens including viruses and bacteria that cause respiratory diseases as well as other gastrointestinal infection and sexually transmitted infection.
“Remarkable changes will be observed from the second half of next year,” the biology professor-turned-CEO said.
He said the some 50 assay products that will be developed via the automation system will receive European Conformity Marking, the official stamp of approval to launch products in the market, in June or July next year.
Chun expects that the move will make a significant contribution to the firm’s sales growth.
The company is also heading into a milestone year for the US market entry from 2017 as it plans to seek approval from the US Food and Drug Administration.
Currently, more than 60 percent of the firm’s revenue comes from Europe. The US is the next target as it accounts for half of the global molecular diagnostics market.
“Making inroads into the US market will be accelerated from next year. We have found a partner who will provide molecular diagnostics testing equipment for our reagent products to secure FDA approval,” he said.
Despite high expectations about Seegene’s advanced technology, the firm’s performance has not been impressive over the last three years.
Its operating profit declined to 8.6 billion won in 2015 from 14 billion won in 2013.
But the CEO said the company’s quarterly profit in the October-December period this year will hit a record high, following 110 percent on-year growth in the third quarter.
“Since the company was founded in 2000, we have been focusing on developing assays and technology. From next year we will see fruitful results of the efforts including increased sales from Allplex,” he said.
In fact, the number of hospitals that use Allplex products in European nations has expanded to 157 as of September from only 20 last year.
The company also entered into a worldwide collaboration agreement with Hologic, a leading global health care and diagnostics company, to develop and supply high multiplex real-time PCR reagents in November.
By Park Han-na (firstname.lastname@example.org)