Demand for coronavirus test kits lifts fortune of South Korean firm's founder

Medical workers prepare to take samples from people to test if they are infected with the coronavirus in Seoul on March 10, 2020. PHOTO: AFP
Seegene Inc started developing a coronavirus test kit in late January. PHOTO: SEEGENE.COM

SINGAPORE (BLOOMBERG) - When Seegene Inc started developing a coronavirus test kit in late January, the South Korean company was uncertain about the potential demand as there were just a few confirmed cases in the country at that point. Today, it's churning out tens of thousands amid a pandemic.

Shares of Seoul-based Seegene have surged 89 per cent this year, boosting the value of founder Chun Jong-yoon's 18 per cent stake to US$225 million (S$319.4 million).

Seegene is scrambling to meet a sharp spike in demand for its test kits, including from Italy and Spain, as the US and other countries grapple with shortages. The Philippines, with a population of more than 100 million, had just 2,000 available early last week. The order surge prompted Seegene to boost production for exports to 25 per cent of the total from 10 per cent, according to a company spokesperson.

The firm posted revenue of 102.3 billion won (S$117.9 million) in 2018, with exports accounting for more than 80 per cent of the total, according to a financial statement.

Seegene sales may jump 30 per cent in 2020 from a year earlier with the "unexpected spread of the coronavirus and growth of test kits," Seoul-based Hana Financial Investment said in a Feb 26 research report.

Chun, 63, founded Seegene in 2000, pivoting from a career as a biology professor at Ewha Womans University in Seoul. He received a doctorate in life sciences from the University of Tennessee.

Despite the share-price gains and his increased wealth, Chun cautioned that the company is so busy churning out coronavirus test kits that it's hurting other parts of its business.

"People may think we're making a big break from the current situation, but the company is actually in trouble because we have stopped developing and manufacturing other products," he said in an interview last month with JoongAng Ilbo.

Executives at other health-care products manufacturers and biotechnology firms are growing richer as the pandemic persists. Shares of Malaysia's Top Glove Corp, the world's biggest glove-maker, rose 25 per cent this year, making chairman Lim Wee Chai a billionaire. Joining him in that exclusive club is Cui Jinhai, the chairman of gauze maker Allmed Medical Products Co. Shares of his firm have more than doubled in 2020.

Moderna Inc chief executive officer Stephane Bancel briefly became a billionaire last month after shares of the company soared as it submitted a potential coronavirus vaccine for testing. The stock surged 27 per cent at 3:25pm in New York, following an Associated Press reported that the company and the National Institutes of Health were beginning a clinical trial.

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