[Edaily Reporter YU JIN-HEE ] SG BioScience (formerly SG CO., LTD.; hereinafter “SG Bio”), a company specializing in in vitro diagnostics, is significantly reducing its “reliance on Seegene Inc.,” which has long been identified as both a growth driver and a potential risk. Following its proactive move to reduce the proportion of internal transactions—which had been heavily concentrated with the Seegene Inc. Medical Foundation—to around 50% this year, the company’s strategy is to achieve a “7:3 golden ratio” between external and internal sales by leveraging its independently developed non-toxic quantum dot (QD) diagnostic platform.

Significantly reduced the proportion of revenue from the Seegene Inc. Medical Foundation, which had soared to the high 70s

According to the pharmaceutical, biotech, and investment banking (IB) industries on the 21st, it has been confirmed that SG CO., LTD. reduced the Seegene Inc. Medical Foundation’s share of total revenue to around 50% as of the first half of this year.

Given that this proportion had soared to the high 70s during the COVID-19 pandemic—when the company supplied large quantities of diagnostic reagents and viral transport media (VTM)—the pace of this structural shift is considered to be very rapid. The company plans to gradually reduce the proportion of revenue from related parties to a final level in the 30–40% range, in time for sales of its next-generation proprietary technology products to gain full momentum.

Seegene Inc.(096530) SG CO., LTD. is an unlisted company subject to external audits, with Chairman Cheon Jong-ki—a member of the family that owns Seegene Inc., which is publicly traded and leads the Seegene Medical Foundation—serving as its largest shareholder (holding a 37.12% stake, or a majority when including friendly shares). For a long time, the company expanded its business by distributing in vitro diagnostic equipment and supplying diagnostic consumables to the Seegene Medical Foundation, its key client.

However, its excessive reliance on a captive market acted as a trigger for increased earnings volatility amid the global transition to an endemic phase. Revenue, which had exceeded 170 billion won annually in 2021 and 2022, plummeted to 120.4 billion won in 2023 and 103.9 billion won in 2024 amid a sharp decline in demand for COVID-19 tests; the company also posted an operating loss of 7 billion won in 2024.

In response, SG CO., LTD. has been implementing management efficiency measures since last year, boldly divesting unprofitable businesses. At the same time, the company has completely overhauled its organizational structure to focus on diagnostic devices and bio-components based on its own high-margin core technologies. As a result, the company recorded revenue of 120.6 billion won last year—a 16.1% rebound from the previous year—and achieved a turnaround to profitability with an operating profit of 2.4 billion won. This success stems from steadily expanding its exclusive domestic distribution network for Hitachi’s automated analyzers to major university hospitals, as well as completing preparations to commercialize new products developed through its in-house research and development (R&D) capabilities.

A key factor driving SG CO., LTD.’s accelerated business restructuring is that the Korea Exchange (KRX) applies the strictest standards when verifying the proportion of internal transactions among related parties and revenue independence during the preliminary review process for an initial public offering (IPO). For SG CO., LTD., which is preparing for a KOSDAQ listing, failing to diversify its external client base would make passing the preliminary review uncertain.

A Bold Move for Structural Improvement with a Quantum Dot Diagnostic Platform

The decisive factors for revenue diversification and a successful KOSDAQ listing are the next-generation quantum dot diagnostic platform “InstaQ” (InstaQ COV/Flu/RSV Ag Multi) and the dedicated reader “InstaRead M,” both of which were recently officially unveiled. On the 9th, SG CO., LTD. held a product briefing at the Seegene Inc. Art Hall in the Seegene Medical Tower in Dongdaemun-gu, Seoul, and unveiled its new product lineup, which will be officially launched next month.

The new product is a multiplex point-of-care testing (POCT) medical device that uses fluorescence immunoassay (FIA) technology to simultaneously detect four major respiratory pathogens—COVID-19, influenza A and B, and respiratory syncytial virus (RSV)—from nasopharyngeal specimens in just 20 minutes. The device has secured quality reliability by obtaining official in vitro diagnostic medical device approval from the Ministry of Food and Drug Safety.

Quantum dots—ultrafine semiconductor nanoparticles with a diameter of 10 nanometers (nm) or less—are a cutting-edge new material that garnered global attention as the subject of the 2023 Nobel Prize in Chemistry-winning research. Compared to gold (gold particles) or organic fluorescent substances, which were primarily used in existing rapid antigen test kits, they offer significantly higher light stability and a stronger luminescent signal. In particular, the company completely eliminated toxic cadmium—a critical weakness in early quantum dot diagnostic materials—and independently synthesized an eco-friendly, non-toxic material based on indium phosphide (InP), thereby eliminating potential health risks and environmental regulatory barriers at the source.

Its performance approaches that of large hospital laboratories. According to comparative clinical evaluations conducted at major university hospitals, including Gangnam Severance Hospital, e-STARCO demonstrated clinical sensitivities of 93.5% for COVID-19, 95.8% for influenza A, 92.9% for influenza B, and 97.1% for RSV. Clinical specificity reached 100% for COVID-19 and influenza A and B, and 99.8% for RSV. Even in early-stage patient samples with a cycle threshold (Ct) value of 30 or higher—indicating low viral load compared to polymerase chain reaction (PCR) tests—the test demonstrated high detection performance, reaching 72% for COVID-19.

The InstaRead M, a dedicated reading device that eliminates the limitations of visual interpretation found in existing rapid diagnostic kits, is a key asset in expanding the company’s independent distribution network. It quantifies subtle fluorescent signals to produce consistent results regardless of the tester’s skill level. Measurement data is automatically synchronized with the hospital’s Laboratory Information System (LIS), minimizing reading errors and reducing the administrative burden on medical staff. When used with the dedicated reaction chamber equipment, consecutive readings are possible within one minute after the first sample is processed, which is expected to provide a significant competitive edge in emergency rooms and screening clinics at medium- to large-sized hospitals where patient volume is high.

The company has vertically integrated the entire production process in-house, from the synthesis of quantum dot source materials to reagent formulation, plastic cartridge assembly, and the design of the reader’s optical algorithms. It has already registered and filed 12 domestic and international patents, establishing strong technological barriers to entry.

The pipeline also offers immense scalability. SG CO., LTD. plans to unveil a second-generation reader with improved accuracy in the second half of the year, while also sequentially launching new products capable of simultaneously detecting six or more pathogens by adding adenovirus and human metapneumovirus (hMPV) in the future. In the long term, the company plans to expand its quantum dot platform into the areas of cardiovascular disease, cancer biomarkers, and hormonal disorder testing.

The commercialization of its proprietary pipeline will directly lead to the expansion of direct global exports. SG CO., LTD. is pursuing certification under the European In Vitro Diagnostic Medical Devices Regulation (IVDR) while also aiming to enter the Thai market—a key healthcare hub in Southeast Asia—by the end of the year. The company is currently in discussions with major local medical device distributors and regarding approval procedures with the Thai Food and Drug Administration (TFDA); if the initial shipment is successfully completed, sales channels are expected to expand throughout Southeast Asia.

These strengthened fundamentals are leading to a sharp improvement in performance. The securities and biotech industries anticipate that SG Bio will comfortably maintain double-digit year-over-year growth this year, achieving annual revenue of over 130 billion won. With the proportion of high-value-added in-house products expanding, operating profit is also expected to more than double compared to the previous year.

Having simultaneously addressed the challenges of restoring financial soundness and reducing the proportion of related-party transactions, SG CO., LTD. is accelerating its preparations for a KOSDAQ listing, targeting next year. The company plans to clear the exchange’s screening threshold through a straightforward approach, building on its financial turnaround and adding future growth potential based on its proprietary platform.

Oh Se-mun, CEO of SG BioScience, stated, “InstaQ is the first tangible result of the quantum dot platform technology the company has accumulated over the years being put to practical use in actual medical settings,” adding, “We will pioneer a point-of-care diagnostic paradigm that organically integrates equipment and systems, going beyond simply supplying diagnostic kits.”

He added, “Even amid the rapidly changing diagnostic market, we have not ceased our bold R&D investments,” and noted, “We will prove our corporate value in the global in vitro diagnostics market through our unrivaled technological capabilities, moving beyond the confines of Seegene Inc.’s network.”