3billion eyes US market in rare genetic disease diagnostics post-IPO

3billion, a Korean biotechnology company specializing in AI-based diagnostic tests for rare genetic diseases, said it is enhancing its AI-driven genetic mutation technology to "world-class status" by discovering new drug candidates for rare disease treatments.

Although rare genetic diseases may seem like a niche market—affecting fewer than 1 in 2,000 people—the global market for rare disease genetic testing is estimated to demand 20 million tests annually, with a potential market size of up to 20 trillion won ($14.4 million). 

3billion CEO Keum Chang-won said he recognized the vast potential in this space.

"By addressing 8,000 genetic diseases, we estimate a global diagnostic demand that could impact around 600 million individuals, translating to a market size of about $20 trillion," he said during a presentation for 3billion's initial public offering (IPO) on Kosdaq at a press conference on Friday.

The rare disease market is expected to grow over 10 percent annually over the next decade, creating what Keum describes as a "favorable environment" for 3billion's business model.

A significant portion of 3billion's revenue already comes from global markets, and Keum envisions that ideally 90 percent of sales will originate from international markets, excluding Korea. “The largest growth opportunity lies in the U.S. market,” he said, noting that the market for rare disease genetic testing there is projected to be at least 4 trillion won.

Through its Kosdaq listing, 3billion plans to expand into the U.S.—the largest single-country market—and accelerate its development of rare disease treatments using genomic data from emerging countries. The company has already obtained CLIA certification, allowing it to legally offer diagnostic tests and secure insurance coverage in the U.S.

However, the certification alone won’t instantly translate to increased sales, as insurance claims present substantial hurdles. Keum intends to enhance 3billion's efforts to penetrate the U.S. market following their IPO in 2025, when they plan to establish their first U.S. branch and enter the insurance market.

As of last year, 40 percent of sales were from overseas; by September this year, that figure surged to 70 percent, with Keum expecting it to keep climbing.

As 3billion expands its diagnostics business, Keum envisions building a competitive global patient genomic database. "This database can unlock various business opportunities, especially in developing treatments for rare genetic diseases, which aligns with our mission," he said. The company has already created an AI-driven platform for drug development based on genomic data, achieving, according to Keum, "superior performance compared to the technologies we benchmark against."

3billion's core technology, EVIDENCE, can analyze the pathogenicity of 100,000 genetic variants in five minutes with 99.4 percent accuracy. Another technology, 3ASC, identifies the causative variant responsible for a patient's disease with 98.1 percent accuracy, based on the top five potential causes.

Notably, its AI technology excelled at the sixth Critical Assessment of Genome Interpretation Challenge (CAGI6), a global AI genomic interpretation contest funded by the National Institutes of Health. The company’s model was recently validated as outperforming Google DeepMind's AlphaMissense in pathogenicity prediction in 2022.

"This means that even though they are a leading company in AI, our model from three years ago surpassed theirs," Keum said. He added that with three updates since then, "the performance gap may be even larger now."

3billion is expanding its global reach in the diagnostic market, currently providing services to over 400 institutions in more than 60 countries. The company has recorded a compound annual growth rate (CAGR) of 123 percent over the past three years.

In the first half of 2024, 3billion's revenue tripled compared to the same period in 2023, reaching 80 percent of the total revenue for the previous year. The company's international revenue climbed from 40 percent in 2023 to 70 percent in early 2024. 

3billion is also looking to increase its presence in emerging markets, particularly in Latin America and Asia. With the U.S. market representing over 30 percent of the global market and established insurance systems, Keum said he sees 2025 as a “pivotal year for 3billion to scale its presence globally.”

3billion also aims to develop new drugs for rare genetic diseases by leveraging its genomic data, accumulated from patients over time. Within two years of its Kosdaq listing, Keum said 3billion plans to complete preclinical validations of at least 10 new drug targets and license out at least two to pharmaceutical companies.

3billion is offering 3.2 million shares with a target price range of 4,500 to 6,500 won, aiming to raise up to 20.8 billion won. The final offering price will be set following a five-day demand forecast period from this Thursday to next Wednesday. Following the subscription period on Nov. 5 and 6, the company is set to be listed on Kosdaq on Nov. 14, with Korea Investment & Securities as the lead underwriter for the IPO.