Korean IVD firms eye new markets amid post-pandemic challenges

Seegene’s Covid-19 test kits. [Courtesy of Seegene]

South Korean in vitro diagnostic (IVD) companies are rushing to explore new markets and opportunities as their financial performance weakens in the transition to the endemic phase.

According to industry sources on Sunday, local IVD firms have seen substantial drops in revenue and operating profits in the first half of this year due to reduced demand for Covid-19 test kits.

SD Biosensor, for instance, posted 345 billion won ($262 million) in sales in the first six months of this year, down 84.2 percent from the same period a year ago. It also logged an operating loss of 174.2 billion won versus nearly 1 trillion won profit last year.

Other players face similar challenges.

Seegene saw its first-half revenue amount to 174.9 billion won, down 69.8 percent from the same period last year. It suffered an operating loss of 23.4 billion won.

Another IVD firm Humasis reported first-half revenue and operating loss of 6.8 billion won and 25.1 billion won, respectively, compared to the first-half revenue of 441.2 billion won and operating profit of 272.9 billion won last year.

Market watchers view the current IVD landscape is an expected result in the transition to the endemic phase. However, they believe that these companies can recover by leveraging their accumulated global distribution expertise and cash assets, given the expected continued growth of the overall IVD market.

According to data from U.S. consultancy Frost & Sullivan, the global IVD market is projected to grow at an annual average of 6.9 percent to $138.3 billion in 2026 from $99.2 billion in 2021.

How each company responds to the market dynamics is also receiving attention.

SD Biosensor is expanding its global distribution network through business acquisitions. The company acquired the U.S. IVD firm Meridian Bioscience at the end of last year and is now venturing into the North American market.

In March, the Korean firm acquired a Panama-based IVD distributor, strengthening its marketing channel in Latin America. The company is also expanding its product line by adding new features to existing products, such as HPV testing and cholesterol level measurement.

Seegene, on the other hand, is focusing on non-Covid products.

The company’s second-quarter revenue from non-Covid products reached 49.9 billion won, up 8 percent from the previous quarter and 31 percent from a year ago, marking the ninth consecutive quarter of growth.

Seegene is particularly taking on the challenge of globalizing its syndromic PCR testing, a method that simultaneously detects multiple pathogens causing similar symptoms, enabling the identification of the root cause.

Despite facing management disputes and lawsuits, Humasis took a strategic step by making an investment into M20, a Korean healthcare company specializing in a platform to address sarcopenia, in June to support product development.