COVID-19 test kit maker Seegen flags more than 30-fold rise in Q2 OP

Operating profits at South Korea’s diagnostic reagent maker Seegen Inc. spiked by more than 36 times in the second quarter from a year earlier, far surpassing market consensus, on surging exports of coronavirus test kits.

On August 13, the KOSDAQ-listed company reported 168.9 billion won ($143 million) in operating profits for the April-June quarter, compared with the 4.6 billion won it posted in the same period a year earlier.

Sales jumped by almost 10-fold to 274.8 billion won, versus 29.2 billion won during the same period.

The quarterly results beat market estimates of 156.2 billion won in operating profit and 256.6 billion won in sales, according to financial data services firm FnGuide.

 



Seegen’s Covid-19 test kit, Allplex 2019-nCoV Assay, received approval from South Korea’s drug safety ministry for emergency use in February when the pandemic was in its early stages. Its testing kits are being shipped to around 70 countries, including the US, Canada, Germany, Italy, Spain and France.

As the second Korean reagent producer to join the coronavirus test kit market after Kogenebiotech, it has occupied the market at a fast pace. Last month, the US Food and Drug Administration further expanded emergency-use authorization for the test kit.

Seegen’s artificial intelligent-based development system and the company’s focused efforts to develop the coronavirus testing kit have paid off.

Its test kit targets all three genes – the E gene, the N gene and the RdRp gene -- in one single tube with high accuracy. Its rival companies’ kits target one or two of the three types of genes in a single tube. Thus, Seegen's kits are seen as more effective and time-efficient.

Supporting the second-half business outlook, Seegen is planning to unveil one kit that tests both influenza and Covid-19 later this year as both could simultaneously sweep through the northern hemisphere this coming winter.

In a recent quarterly review, Morgan Stanley Capital International (MSCI) included Seegen in its Korea Index as a constituent, along with two other pharmaceutical companies. The recent stock rally enabled the company to meet MSCI’s market capitalization and liquidity requirements.

The inclusion into the MSCI index means Seegen may draw 140 billion won to 359 billion won in new inflow of passive funds tracking the benchmark, according to the securities industry analysts.

By quarterly results, Seegen overtook its bigger rival Celltrion Healthcare Co. Ltd., the largest KOSDAQ-listed stock in terms of market value. Seegen is the second-biggest stock on the junior stock market.

During the first half of this year, Seegen’s operating profit came to 208.7 billion won, compared to Celltrion Healthcare’s 142.6 billion won.

Write to Ji-yeon Sul at sjy@hankyung.com