Samsung hands over diagnostics business to local bio firm

Samsung Electronics Co. has agreed to hand over the business rights for its in vitro diagnostics (IVD) unit to a South Korean bio company as part of pruning its medical device portfolio.

In June, Samsung Electronics transferred its patent, production and sales rights for PT10V, a veterinary clinical chemistry analyzer, to domestic IVD company Precision Biosensor, according to the investment banking industry on Dec. 7.

Precision Biosensor will pay royalties to Samsung Electronics, and produce the device at its own factory to sell at home and overseas markets. In October, the IVD company began construction of a new factory to facilitate the production. The IVD device will be sold under the new name Exdia PT10V.

Earlier in 2018, Samsung Electronics made an unsuccessful attempt to sell off the IVD business. At the time, Japan-based medical device company Nipro Corporation was held as a potential buyer, but it fell through for numerous reasons, including soured relations between Korea and Japan alongside concerns over a significant downsizing if the business were sold to a foreign company.

Industry watchers say the IVD business transfer is a strategic move for the Korean conglomerate to trim down its medical device business, focusing on operations that are profitable and have high growth potential.

The in vitro diagnostics device detects diseases or other conditions by using samples of blood, urine, or tissue taken from the human body. It is more affordable than other high-end diagnostic equipment, leading to its recent surge in popularity.

However, Samsung Electronics had faced steady criticism over the IVD unit given its weak revenue compared to other operations and as it lacks much synergy with the company's other medical device businesses.

Moving forward, the company is expected to concentrate on medical imaging devices such as X-ray, Computed Tomography (CT) and Magnetic Resonance Imaging (MRI).

Meanwhile, Precision Biosensor is planning a trading debut on the country’s junior bourse Kosdaq by the end of the year. It is hoping to post revenue of 25 billion won ($23 million) on a consolidated basis next year by expanding its clinical chemistry operations.

Last year, the company posted 6.2 billion won in revenue on a consolidated basis and expects to record 8 billion won this year.

Write to Ye-jin Jun at ace@hankyung.com
Danbee Lee edited this article.