"Lunit Eyes Treatment Solutions, Raising Hopes for Increased Corporate Value"

Lunit, a leading medical AI company focused on developing solutions that extend beyond diagnosis into treatment, is expected to see a steady increase in corporate value, according to industry analysts.

Baek Ji-Woo, a researcher at Shinhan Investment & Securities, commented on August 23, "Lunit has developed solutions that best meet the demands of physicians, the end-users of medical AI. We expect gradual revenue growth."

Lunit recently completed the acquisition of New Zealand-based breast cancer diagnostics company Volpara Health Technologies in Q2. The synergies from this acquisition have already started to show. Lunit reported approximately KRW 6.5 billion (USD 4.9 million) in revenue from Q2, and according to Baek, the company is projected to generate KRW 25 billion (USD 18.8 million) by the end of this year and approximately KRW 50 billion (USD 37.6 million) next year.

Volpara provides breast cancer screening solutions to over 2,000 medical centers in the U.S., with 97% of its revenue coming from the American market. This positions Volpara as a key player in Lunit's U.S. expansion strategy, according to Baek.

Lunit's core product, the mammography image analysis solution "Lunit INSIGHT MMG," became available for non-reimbursed use in the domestic medical market as of Q3 this year, with a maximum period of five years. Previously, hospitals covered the cost of using Lunit’s solution themselves. Now, they can bill patients, which is expected to encourage broader adoption of the technology.

Lunit INSIGHT MMG was recently selected for the Public Procurement Service's Innovation Product Pilot Purchase Program on August 16, securing supply contracts with five public medical institutions in South Korea, thus steadily expanding its business-to-government (B2G) presence. Baek noted that "if Lunit INSIGHT undergoes a new medical technology assessment and is officially listed for health insurance coverage, we can expect rapid domestic sales growth."

Baek also highlighted that Lunit's ability to maintain the highest market capitalization in the medical AI sector is largely due to the success of "Lunit SCOPE." "This solution demonstrates that medical AI companies can go beyond diagnosis and enter the treatment space," Baek said.

Lunit SCOPE is an AI-based biomarker solution for immuno-oncology treatments. It plays a crucial role in determining which drugs are suitable for a cancer patient, assessing which treatments will yield the highest efficacy and safety.

Immuno-oncology treatments are known for their high cost, with a single dose costing up to KRW 100 million (USD 75,000). However, identifying patients who will benefit from the drugs remains a challenge. The U.S. Food and Drug Administration (FDA) has recommended companion diagnostics using biomarkers before administering immunotherapy.

Lunit SCOPE utilizes an AI model specialized in processing large-scale images, capable of analyzing 16 types of cancers, including cervical and gastric cancers. It identifies immune cells within tumors, selecting appropriate candidates for immunotherapy and helping devise personalized treatment strategies.

Baek acknowledged, "While Lunit SCOPE is currently generating revenue solely from research, it may be difficult to anticipate immediate milestone revenues. However, if partnerships with pharmaceutical companies lead to its actual use in companion diagnostics, explosive revenue growth could follow."