Medical AI Company Lunit Raises Large-Scale Funding to Aim for Cancer Overcoming

Raised 201.9 Billion KRW Through Rights Offering and General Public Subscription
10-Year Vision: Annual Sales of 10 Trillion KRW and Operating Profit of 5 Trillion KRW

This year, Lunit, a medical artificial intelligence (AI) company whose stock price has risen more than 400%, has launched a large-scale fundraising effort. The company plans to secure funds for overseas expansion and research and development (R&D) to achieve its goal of "annual sales of 10 trillion KRW and operating profit of 5 trillion KRW" in 10 years.

According to the Financial Supervisory Service's electronic disclosure system, Lunit will raise 201.9 billion KRW through a rights offering followed by a general public offering of forfeited shares, allocating 0.15 new shares per existing share. The planned issue price for the new shares is 108,700 KRW, with the final price to be confirmed on October 27.

Founded in 2013 as a first-generation medical AI company, Lunit commercialized diagnostic assistance solutions that complement human visual limitations using AI technology. It developed imaging biomarker solutions that discover new biomarkers based on medical imaging. Its main products include 'Lunit INSIGHT,' an imaging diagnostic solution related to cancer diagnosis, and 'Lunit SCOPE,' an imaging biomarker solution related to cancer treatment. As interest in medical AI grew, Lunit's stock price surged 422.5% from 29,800 KRW at the end of last year to 155,700 KRW on the 25th.

Lunit aims to transform into a medical AI platform company necessary for cancer diagnosis, treatment, and monitoring by utilizing the raised funds. The secured capital will be used for ▲product advancement through strengthened R&D ▲development of next-generation new products ▲global expansion and establishment of a corporate venture capital (CVC) ▲new overseas employee recruitment.

Interest in Lunit's products has increased overseas this year. Recently, Lunit joined CancerX, part of the Biden administration's Cancer Moonshot project. By investing in its U.S. subsidiary, it is expected to actively respond to the Cancer Moonshot project. The Cancer Moonshot, promoted by U.S. President Joe Biden, aims to reduce cancer-related mortality in the U.S. by more than 50% by 2025 by strengthening bioindustry capabilities. Global pharmaceutical companies such as Johnson & Johnson, Takeda, and AstraZeneca are participating.

Lunit's technology has gained recognition not only in the U.S. but also in Europe and the Middle East. In June, Lunit agreed to provide its breast cancer diagnostic solution 'Lunit INSIGHT MMG' to Capio Saint G?ran Hospital, Sweden's largest private hospital. Previously, Lunit conducted a prospective clinical trial involving over 55,000 patients for 14 months at a Swedish university hospital, establishing reliability. The cancer detection rate was higher when Lunit INSIGHT MMG was applied after one radiologist's reading compared to double readings by two radiologists. Starting with Saint G?ran Hospital, Lunit is expected to make a full-scale entry into Europe.

Last month, Lunit signed a contract to supply breast cancer diagnostic AI solutions to all hospitals under the Suleiman Al-Habib Medical Group (HMG), the largest private medical institution in Saudi Arabia and the Middle East. HMG will utilize Lunit INSIGHT MMG in Saudi Arabia's national breast cancer screening project.

Having proven its potential overseas, Lunit will invest an additional 50 billion KRW or more in its overseas subsidiaries. In 2018, Lunit established Lunit USA in Massachusetts to enter the U.S. market. To fully advance its U.S. business, it plans to invest approximately 24.2 billion KRW by the second half of 2026. It will conduct joint research with U.S. research institutions, hire new employees, and use funds for product advertising. In March 2023, Lunit established Lunit Europe Holdings to enter the European market, investing 26.3 billion KRW in the subsidiary.

Along with investments in overseas subsidiaries, Lunit is also investing heavily in research and development (R&D). Its main product, Lunit INSIGHT, is a cancer diagnostic imaging reading assistance and risk prediction solution. As medical AI advances, it is steadily developing next-generation diagnostic solutions to expand cancer indications. It invests funds in purchasing and managing necessary medical data. It also promotes joint research with various research institutions to prove the reliability of Lunit INSIGHT.

On the morning of the 24th, at the 10th anniversary meeting held at Lunit Square in Gangnam-gu, Seoul, CEO Beom-seok Seo stated, "Based on AI technology, in which domestic companies have particular strengths, we will improve the quality of medical services at medical institutions worldwide and increase the survival rate of cancer patients," adding, "We will surely realize the founding spirit and corporate philosophy of conquering cancer through AI."

At the keynote speech of the 10th anniversary meeting, Chairman Seung-wook Baek said, "I believe Lunit is at the very early stage of the journey to conquer cancer," and "We will concretely execute strategies to grow over the next 10 years."

Chairman Baek and CEO Seo will each acquire all the newly allocated shares they were assigned, worth 14 billion KRW and 3.6 billion KRW respectively. This move, amid a surge in stock price and a capital increase, reflects the management's confidence. Jong-hyun Park, a researcher at Daol Investment & Securities, analyzed, "Lunit has clearly presented its vision for business development using AI," and "It is worth paying attention to Lunit's path as a medical AI device company aiming for personalized medicine."