Seegene's preliminary earnings results for the second quarter showed a continued deterioration in the company's performance, as the COVID-19 outbreak entered an endemic phase.

According to a public filing by Seegene last Friday, the company's sale in the second quarter was 84.9 billion won ($63.7 million), a 33.9 percent decrease from the same period last year. The company also turned to a net loss of 2.5 billion won in the second quarter,  compared to a net profit of 2 billion won a year earlier.

However, the company managed to reduce operating loss from 13.7 billion won in the second quarter of last year to 9.6 billion won this year.

Despite the sluggish business report, the company said it could achieve the long term growth of non-Covid products and promote the technology sharing business.

Diagnostic reagents revenue increased slightly to 60.2 billion won in the second quarter, driven by growth in non-Covid-19 product sales during the off-season.

Sales of non-Covid products were 49.9 billion won, up 8 percent from the previous quarter and 31 percent compared to the same period last year.

Non-Covid product sales accounted for 60 percent of total sales and 75 percent of reagent sales.

Among non-Covid products, sales of respiratory virus diagnostic devices grew 7 percent, respiratory bacteria diagnostic, 88 percent, gastrointestinal general diagnostic products, 66 percent, and cervical cancer,  44 percent, year-on-year.

"In respiratory and gastrointestinal diagnostics, we continue to see strong demand for syndromic tests," the company said. "HPV tests for cervical cancer have also seen strong market growth since the launch of Allplex."

Looking ahead to the second half, the company said that Covid-19 sales will not have an impact on its second-half performance as it expects the sales decline to subside.

"We expect our growth to be driven by non-Covid-19 product sales, which have continued to grow above 30 percent for five consecutive quarters," the company said.

Seegene to revamp revenue structure with technology sharing business

Seegene is preparing for a complete transformation into a global molecular diagnostics distribution company through its mid- to long-term business strategy of technology sharing.

The idea of the technology sharing business is that partner companies will develop standardized products based on Seegene's technology, and the company will distribute and sell these products to the global market, while the partner company will take care of local licensing and import.

The company signed business agreements with Hylabs, a leading Israeli biotech company, and Werfen, a leading Spanish diagnostic company, and signed a strategic partnership agreement with Springer Nature in the U.K., this year.

Through the partnership, the company is actively discussing follow-up projects such as a reagent development competition.

In the second half of this year, the company aims to sign contracts with representative companies in each country, and plan to cooperate with companies in 100 countries by 2028.

"In this regard, the company is also planning to acquire equipment, IT, and consumable companies," a company official said.