In light of detecting a new Covid-19 variant called Omicron, Korean diagnostic kit makers are drawing attention from investors again.

After experts raised concerns that the Omicron variant, first identified in South Africa recently, would be highly contagious and thwart existing Covid-19 vaccines, analysts said testing devices for determining the variant would be crucial to prevent the viral spread.

Omicron is known to have 32 mutations in the spike protein and the Delta variant, 16.

The Covid-19 virus uses the spike protein to penetrate the human cells. Still, Omicron’s 32 mutations can sidestep the vaccines’ effect and become highly transmissible.

Experts have yet to present evidence for the Omicron variant’s transmission power or fatality rate.

Korean diagnostic kit manufacturers are drawing attention again as the Omicron variant became a new threat amid the Covid-19 pandemic.
Korean diagnostic kit manufacturers are drawing attention again as the Omicron variant became a new threat amid the Covid-19 pandemic.

Analysts released a series of reports predicting how the Omicron variant would affect the market.

On Monday, EBEST Investment & Securities said in an industry analysis report that it was a problem that the vaccines had a waning effect over time and the Omicron variant was highly contagious.

However, the biggest problem is that Conventional diagnostic kits or testing kits do not readily identify omicron for variants, the report said.

As Omicron mutations occur in the S gene, it will be difficult to identify them with Korean test kits using RdRp, E, and N sites, the report said.

The brokerage said people would need to develop a PCR testing method to analyze the S gene of the Covid-19 variants.

Kyobo Securities also said that the spread of Omicron would boost the shares of Korean diagnostic device manufacturers.

When the Delta variant spread, Seegene’s shares started to draw attention from June 21 and surged by about 40 percent until early July, Kyobo said.

Kim Jeong-hyeon, an analyst at Kyobo Securities, said as the emergence of the Omicron variant requires the development of new testing kits, diagnostic companies will enjoy a new momentum for stock price hikes along with a spike in Covid-19 confirmed cases.

The Korean diagnostic kit industry is closely watching the Omicron variant. Although it is still in the early stage of the spread, the WHO classified it as a variant of concern (VOC) with the highest alert level within two days, unprecedented.

Seegene, having a PCR testing technology, said it began to check whether its existing test kits could identify Omicron. After reviewing this, the company will decide whether to release a new device to respond to Omicron.

“We cannot confirm whether conventional products can detect Omicron, and we’re still checking it,” an official at Seegene said. “Depending on the results, we will review whether we need a plan to develop a new product.”

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