[At a Crossroads: Listed Companies] SiseonBio's 'COVID-19 Diagnostic Kit' Hits Big... Panagen Only 1.1 Billion KRW Sales①

[Asia Economy Reporter Jang Hyowon] It has been confirmed that Panagen recorded sales of 1.1 billion KRW in the first half of this year by supplying artificial gene (PNA) materials to Siseon Biomaterials. Siseon Bio is a company operated by CEO Park Heekyung, the wife of Panagen CEO Kim Sungki.

Kim Sung-ki, CEO of Panajin.

Siseon Bio is estimated to have achieved large-scale sales by becoming the fourth company in Korea to obtain Emergency Use Authorization (EUA) from the U.S. Food and Drug Administration (FDA) for its COVID-19 diagnostic kit.

According to the Financial Supervisory Service's electronic disclosure on the 24th, Panagen recorded sales of 1.141 billion KRW from Siseon Bio in the first half of this year. This accounts for about 15.3% of the total sales of 7.2 billion KRW. It increased by 205% compared to 373 million KRW in the previous half-year.

The increase in Panagen's sales to Siseon Bio is analyzed to be due to Siseon Bio's production of COVID-19 diagnostic kits. Panagen supplies PNA materials to Siseon Bio. PNA is an artificial nucleic acid known to be optimized for molecular diagnostic technology applications.

On April 28, Siseon Bio obtained Emergency Use Authorization from the U.S. FDA for its COVID-19 diagnostic kit, the ‘U-TOP COVID-19 Detection Kit.’ It is the fourth company in Korea to receive this authorization, following Osang Healthcare, Seegene, and SD Biosensor.

Subsequently, on May 22, the rapid diagnostic kit ‘AQ-TOP COVID-19 Rapid Detection Kit,’ which significantly reduces testing time compared to existing products, also received FDA Emergency Use Authorization. Both products utilize PNA materials.

Accordingly, Siseon Bio's sales are also estimated to have increased significantly. For example, Seegene recorded sales of 356.6 billion KRW and operating profit of 208.7 billion KRW in the first half of this year, surging 528% and 1897.3% respectively compared to the same period last year. Osang Healthcare achieved an operating profit of 118.1 billion KRW, a 295-fold increase compared to 400 million KRW in the first half of last year.

Siseon Bio, established in 2012, is a company developing in vitro diagnostic reagents. Its main products include reagents for genetic diseases, hereditary tumors, and virus testing. CEO Park Heekyung is a former head of Panagen’s research institute and the wife of Panagen CEO Kim Sungki.

However, there is no equity relationship between Siseon Bio and Panagen. The CEO is included as a related party only because of family ties. Even if Siseon Bio achieves ‘blockbuster’ sales, the actual benefit Panagen gains is limited to an increase in the supply volume of PNA raw materials.

As a result, the market is questioning why Panagen, which manufactures not only PNA materials but also diagnostic kits, did not directly produce COVID-19 diagnostic kits.

In response, a Panagen official stated, “Since the company has been a management target due to four consecutive years of losses, developing a COVID-19 diagnostic kit involved significant risk, so it was a management decision not to develop it.”