[NA Eun-kyung, Edaily Reporter] South Korean medical artificial intelligence stocks rallied on October 26 after Lunit announced a research partnership with U.S. biotech company Summit Therapeutics to identify AI biomarkers for a next-generation cancer drug. The announcement drew investor attention to other companies in the sector, including VUNO, Neurophet, SEERS, Noul, and 3billion, reflecting expectations that medical AI will expand beyond diagnostic support into drug development.

Investors are also keeping an eye on company-specific milestones. VUNO is awaiting the results of a new health technology assessment for its flagship product, VUNO Med-DeepCARS. Neurophet is pursuing overseas sales and partnerships with major pharmaceutical companies as the Alzheimer’s treatment market grows, although talks on commercial agreements are taking longer than expected.

Lunit Expands from Cancer Detection into Drug Development

Lunit’s partnership with Summit Therapeutics was a key catalyst for the rally. Lunit shares rose 3,390 won, or 30%, to close at 14,690 won, according to KG Zeroin’s MP Doctor market data service, formerly MarketPoint. The companies agreed to apply Lunit’s AI biomarker platform, Lunit SCOPE IO, to the research and development of Summit’s immunotherapy candidate, ivonescimab.

Ivonescimab is a bispecific antibody that targets both PD-1, which suppresses the immune system’s response to cancer, and vascular endothelial growth factor (VEGF), which helps tumors form blood vessels. Summit licensed development and commercialization rights in major overseas markets from China’s Akeso. The drug has garnered attention following AstraZeneca’s announcement of a $2 billion investment in Summit and plans to develop combination therapies with its antibody-drug conjugates (ADCs).

Lunit will analyze the distribution of cancer and immune cells, along with surrounding tissue structures, using existing tissue slides. The goal is to identify characteristics of patients most likely to benefit and provide evidence to help researchers understand treatment responses. The partnership expands the role of AI from helping hospitals detect cancer to supporting clinical trial design and patient selection.

U.S. investors have also shown interest in companies supplying the data and analytical equipment needed for AI-driven drug development. Shares of 10x Genomics, a provider of single-cell and spatial biology analysis equipment, had risen about 339% this year, according to a report released that day by Han Seung-yeon, an analyst at NH Investment & Securities.

“As AI-driven drug development advances, precise data have become more important, positioning equipment supplier 10x Genomics as a potential beneficiary,” Han wrote.

Lunit began collaborating with 10x Genomics in September to identify biomarkers for cancer drugs. The partnership combines molecular information—including gene data generated by 10x Genomics—with Lunit’s AI-powered pathology analysis to identify features associated with treatment response and resistance.

“This is a clear example of SCOPE expanding its applications as an analytical technology essential for AI-driven drug development,” Han wrote. “We view Lunit as the company with the greatest potential for a business valuation reassessment in South Korea’s AI healthcare sector in 2027.”

Han argued that investors should look beyond companies designing drug candidates to those supplying experimental materials and data or helping improve the chances of clinical success. Lunit’s expansion into those areas through SCOPE supports the case for a reassessment of its business value in 2027, he said.

VUNO Faces DeepCARS Assessment and U.S. Refiling Milestones

VUNO shares rose 1,770 won, or 29.95%, to close at 7,680 won. Key milestones for the remainder of this year and early next year include the new health technology assessment of VUNO Med-DeepCARS and a renewed application for U.S. Food and Drug Administration (FDA) clearance.

DeepCARS analyzes blood pressure, pulse, respiratory rate, and body temperature to assess the risk of cardiac arrest within 24 hours among patients in general wards. It was the first AI medical device approved for early clinical use in South Korea and has been used outside the scope of national health insurance coverage under a program that defers new health technology assessments.

The National Evidence-based Healthcare Collaborating Agency (NECA) held a meeting of its new health technology assessment committee on October 23. October 26 was the first trading day following the meeting, and expectations surrounding the assessment may also have contributed to the rise in the stock price.

“The committee meets every month, and this month’s meeting was held on October 23,” a NECA official said. When asked about the outcome, the official stated that the agency could not disclose it before it was published on its website. Industry participants expect companies to receive the results in mid-November.

A favorable assessment would allow the technology to move beyond temporary use and gain formal recognition as a new health technology. VUNO expects that reduced uncertainty regarding continued use will encourage adoption by additional hospitals.

“The assessment deferral program allows for temporary use,” a VUNO representative said. “If the technology is approved for regular use, we expect more institutions that have hesitated due to uncertainty to adopt it.”

Passing the assessment would not automatically secure national health insurance coverage. Separate procedures, including a review by the Health Insurance Review and Assessment Service (HIRA), would follow.

“Following the new health technology assessment, the technology will undergo a review by HIRA as part of the reimbursement process,” the VUNO representative said. “We expect that process to take place next year.”

VUNO is also preparing to resubmit its application for FDA clearance. In April, the FDA determined that DeepCARS had not demonstrated substantial equivalence under the agency’s 510(k) premarket notification process.

“The key milestones this year and early next year are the new health technology assessment of DeepCARS and the FDA resubmission,” the representative said. “We aim to resubmit by the end of this year.”

Neurophet’s talks with drugmakers are taking longer

Neurophet shares rose 900 won, or 15.96%, to close at 6,540 won. The company is also seeking to capitalize on the growing role of medical AI in global drug development.

Its brain imaging technology supports patient assessment prior to Alzheimer’s treatment and monitoring for side effects during treatment. It is also pursuing imaging core lab (ICL) services for pharmaceutical and biotech companies conducting clinical research.

“We believe today’s share price increase reflects improved investor sentiment and a broader rally in medical AI following the announcement of Lunit’s AI biomarker research partnership with Summit,” a Neurophet representative said. “Interest in related companies appears to have increased as the potential use of medical AI in global drug development comes into focus.”

A key priority is converting technology validation projects with global drugmakers into commercial agreements. Neurophet has been working with Eli Lilly and Roche and had aimed to secure commercial agreements by the end of this year. However, those discussions are taking longer than expected.

“We continue to discuss commercial agreements with global pharmaceutical companies,” the representative said. “However, their technology validation and commercialization reviews are rigorous, and detailed discussions are required, so the timeline has been somewhat delayed.”

“We are continuing discussions and working through the relevant procedures with the goal of signing commercial agreements as soon as possible,” the representative added.

Neurophet is also expanding its U.S. customer base. Neurophet AQUA AD Plus, which received FDA clearance this year, secured a supply agreement with Elevate Clinic in the United States in August. The company is discussing additional supply agreements with North American medical institutions.

A key issue next year will be the extent to which these supply discussions and partnerships with drugmakers translate into contracts and revenue. Wider prescribing of Alzheimer’s treatments such as Leqembi could also boost demand for imaging analysis.

“Demand for our main products is gradually increasing as Leqembi prescribing expands,” said a Neurophet representative. “We expect continued growth in product supply and revenue.”