[Edaily Reporter Minji Son ] #Curiosis Inc. has secured German company Merck KGaA as a client, following global life sciences firm Revvity Biomed, and is moving to expand its Original Design Manufacturing (ODM) business. Although both contracts involve Curiosis Inc. supplying its proprietary products under the clients’ brands, there are differences in how order volumes are finalized and the scope of sales. Consequently, the ability to stably deliver the contracted volume to Revvity while generating repeat orders through Merck’s global distribution network is expected to be key to Curiosis Inc.’s performance in the second half of this year and next year.

According to Curiosis Inc. on the 19th, the company signed a global supply agreement with Merck on the 12th for automated cell imaging products. Under this arrangement, Curiosis Inc.’s live-cell imaging system, the “Celloger Mini Plus,” will be customized with software incorporating Merck’s specifications and supplied under the Merck brand. The Celloger Mini Plus is a cell observation device that allows for long-term observation and analysis of cultured cells without removing them from the incubator.

The contract term is five years, beginning on the 7th of this month, and will be automatically renewed on a yearly basis thereafter. Revenue from the contract is expected to be recognized sequentially based on individual purchase orders (POs) received from countries around the world.

“Common Ground” with Original Products and a Strong Global Sales Network

The contract with Merck shares common ground with the contract with Levity in that Curiosis Inc. delivered products tailored to customer requirements based on its proprietary products. Under this arrangement, the customer sells the products using its own brand and distribution network, while Curiosis Inc. handles product development and production. This structure gives Curiosis Inc. a greater role and influence than in a typical original equipment manufacturer (OEM) arrangement, where the company merely manufactures products designed by the client.

Previously, in August of last year, Curiosis Inc. signed a supply contract with Levity for a high-throughput screening (HTS) live-cell imaging system. Subsequently, the companies expanded their collaborative product portfolio by signing an additional supply contract for the Colony Picker (CPX) this year. The Colony Picker is a device that automatically selects cultured colonies (aggregates) and transfers them to other culture vessels. Both products are supplied to Levity based on Curiosis Inc.’s proprietary technology and products.

Because they are based on Curiosis Inc.’s proprietary products, the company’s in-house development and production capabilities are a common advantage of both contracts. Curiosis Inc. designs and manufactures most of the core components—such as circuit boards—used in its equipment in-house to produce finished products. Consequently, when customer orders are received, the company can respond to delivery requests relatively quickly without relying on external manufacturers.

Furthermore, since the company handles the design and production of major components in-house, it is immune to exchange rate risks. This is because, although it receives payments in foreign currency from overseas customers, a significant portion of its production costs is incurred domestically in Korean won.

Curiosis Inc. official stated, “We design and manufacture the vast majority of the components used in our finished products ourselves,” adding, “As an export-oriented company, a strong exchange rate trend could actually be beneficial.”

Another commonality is the ability to leverage the global sales networks of Merck and Levity. Curiosis Inc. can sell its products through the overseas sales networks of these two clients without having to build its own country-specific sales organizations and distribution networks. This structure allows the company to secure global customer touchpoints while reducing the time and costs required to build its own distribution infrastructure.

Levity: Focus on Revenue Visibility; Merck: Focus on Potential

The biggest differences between the two contracts lie in the minimum order quantity (MOQ) and the sales approach.

First, since the equipment for Levity consists exclusively of products developed specifically for Levity, the contract specifies the supply volume. The supply scale was determined based on the three-year MOQ for the Levity Colony Picker, which was signed this year.

The supply contract for the high-throughput HTS-type live-cell imaging system, signed last August, was extended this year through March 31, 2029, and the supply volume was increased to approximately 10 billion won. At the same time, the contract structure was changed to a system where the MOQ is determined on a quarterly basis. This approach was adopted to facilitate the forecasting and management of quarterly revenue, taking into account the financial closing dates of both companies and the actual product delivery schedules.

In contrast, no MOQ was set in the contract for Merck-branded products. This is because, unlike the Levity contract, it follows a “two-track structure” in which Curiosis Inc. supplies Merck-branded products while continuing to sell its own-brand products based on the same intellectual property (IP).

Although the two companies shared broad forecasts of expected sales volumes during negotiations, they did not include mandatory purchase quantities in the contract. Consequently, it is difficult to estimate future sales volume based solely on the contract term for the Merck agreement. Curiosis Inc.’s actual production and sales will only materialize once Merck secures demand in each country and issues individual purchase orders (POs).

There are also differences in sales regions. The Levity contract is currently focused on the Chinese market, including Hong Kong and Macau. Curiosis Inc. initially planned to sequentially expand its supply scope from China to Europe, the U.S., and other global regions, but external factors—such as conflicts in the Middle East—have caused subsequent contracts to be delayed beyond expectations. Nevertheless, the company is exploring the possibility of additional supply agreements with approximately 100 countries in regions outside China, Europe, and the U.S. (GGM). Some analysts suggest that a contract for the European region may materialize first at this stage.

In contrast, the contract with Merck targets the global market from the outset. Merck, which has secured global sales rights for Curiosis Inc.’s products, is introducing the products to the global market through its U.S. life sciences subsidiary, EMD Millipore.

In this regard, the Levity contract offers relatively higher short-term revenue visibility. Since quarterly supply volumes are fixed, it is easier to assess production plans and projected revenue. However, while the contract with Merck does not currently have a confirmed volume, it holds significant mid- to long-term growth potential given its global scope. Furthermore, unlike with Levity, the frequency and scale of orders following the global launch are more important than the signing of the contract itself.

Key points to watch going forward include the smooth shipment of volumes to Levity, additional supply contracts, and repeat orders for Merck. Since Curiosis Inc. develops and manufactures its main products in-house, increasing production volumes beyond a certain threshold can lower the fixed manufacturing costs per unit, thereby enabling the ODM business to contribute to the company’s improved profitability.

In addition to Levity and Merck, Curiosis Inc. is discussing additional ODM contracts with other global companies. Although details have not yet been finalized, it is reported that discussions are ongoing not only for live-cell imaging equipment but also for other product lines. The company plans to cultivate ODM as its largest growth driver going forward.