[Market Focus] Genomictree Shares Rise on Announcement of Milestone Payment for China Clinical Trial

As of 9:31 a.m. on June 12, shares of Genomictree, a company specializing in early cancer diagnosis, were trading at 14,320 won on the KOSDAQ market, up 10.07% from the previous day's closing price. This appears to be due to the company's announcement that it has received a milestone payment for successful clinical trials in China.

Founded in 2000, Genomictree has commercialized products that enable early cancer detection by developing biomarker-based in vitro molecular diagnostic technology. The company's core technology involves the discovery of DNA methylation biomarkers and ultrasensitive detection. Its flagship product, 'EarlyTect Colorectal Cancer Test (EarlyTect-C),' received approval from the Ministry of Food and Drug Safety in Korea in 2018 and has been available in the domestic market since 2019. EarlyTect-C is a kit that determines the presence of colorectal cancer using a portion of the patient's stool sample. Unlike colonoscopy, it does not require tissue invasion, making it a convenient method for cancer detection.

On June 11, Genomictree announced that it had received a milestone payment of 1 billion won from Shandong Lukang Haoliyou for the successful completion of clinical trials for EarlyTect-C in China. Shandong Lukang Haoliyou is a joint venture established by Orion Holdings and China's Lukang Pharmaceutical. In May 2021, Genomictree signed a technology transfer agreement worth a total of 6 billion won with this company and received an upfront payment of 2 billion won at that time.

Since then, Shandong Lukang Haoliyou has established production infrastructure for in vitro colorectal cancer diagnostic products in China. In 2023, it initiated local clinical trials for colorectal cancer in China and completed these trials in January 2024. Based on the recent clinical results, the company has applied to the National Medical Products Administration (NMPA) for manufacturing approval of the colorectal cancer diagnostic product.

A Genomictree representative explained, "The milestone condition was met at the time of the manufacturing approval application, which allowed us to receive the 1 billion won milestone payment. If final manufacturing approval is obtained in China, we will receive an additional milestone payment of 1 billion won. Depending on the partner company's sales performance, we expect to receive up to 2 billion won in milestone payments, as well as separate royalty revenue."

Meanwhile, according to the China National Cancer Center and Qianzhan Industry Research Institute, approximately 4.83 million new cancer cases were reported in China in 2022, with about 520,000 cases of colorectal cancer. In China, colorectal cancer ranks second in cancer incidence after lung cancer.