Korea's SD Biosensor to supply diagnostics kits to Japan in H2

SD Biosensor Inc., South Korea’s leading in-vitro diagnostics company, has signed an agreement to supply its COVID-19 self-test kits and other devices that simultaneously diagnose COVID-19 and influenza to the Japanese government, the Korean firm said on Thursday.

The deal is worth 148.3 billion won ($112 million), 5.06% of its 2.9 trillion won revenue in 2021, SD Biosensor said. The contract period is between Aug. 18 and Nov. 30 of this year.

The device that simultaneously diagnoses flu and COVID-19 can detect various types of coronavirus, including the Omicron and Delta variants, as well as influenza A and B within 15 minutes.

“We see increasing demand for the test kits in Japan as the government is considering downgrading the classification of COVID-19 to the equivalent of seasonal flu,” said an SD Biosensor official. “We will quickly respond to the rising demand as both the flu and COVID-19 are expected to widely spread in the second half,” the official added.   

SD Biosensor reported 795 billion won in revenue and 348.1 billion won in operating profit in the second quarter, respectively down 42.7% and 43.8% from the first quarter. Drops in global demand for COVID-19 test kits impacted the company’s earnings.

Despite its sluggish sales in the second quarter, the company set the highest record for half-year results – 2.2 trillion won in revenue and 967.7 billion won in operating profit in the first half. The half-year revenue reached 75% of 2021's annual revenue of 2.9 trillion won. In 2019, the company’s annual revenue was only 73 billion won.   

Amid concerns that its earnings already peaked, the firm is looking to expand its POC (point of care) portfolio through M&As, founder and Chairman Cho Young-shik said in July. 

His announcement came after the firm acquired Nasdaq-listed diagnostics company Meridian Bioscience Inc. in the same month. SD Biosensor bought Meridian with private equity firm SJL Partners LLC for about $1.53 billion.   

In April of this year, SD Biosensor said it is acquiring a 100% stake in Relab Srl, an Italian medical device distributor, for €46.2 million ($47 million) to enter the European market.   

The Korean diagnostics firm also bought German diagnostics products distributor Bestbion for 16.1 billion won in March of this year and the entire stake in Brazil’s diagnostics kit company Eco Diagnóstica for around $40 million in late 2021.

Write to Min-Soo Han at hms@hankyung.com
Jihyun Kim edited this article.