[IPO Spotlight] Lunit Aims for 150 Billion KRW Revenue in 2025 with AI Cancer Diagnosis Technology

[Asia Economy Reporter Jang Hyowon] Lunit, a company possessing AI technology-based medical imaging analysis solutions, is knocking on the door of the KOSDAQ market.

Founded in 2013, Lunit is a medical AI company with key products including the AI imaging analysis solution for cancer diagnosis, ‘Lunit INSIGHT,’ and the AI biomarker platform for cancer treatment, ‘Lunit SCOPE.’

Lunit INSIGHT is an imaging reading assistance solution related to cancer diagnosis. It applies deep learning technology to medical imaging tests to detect cancer early or predict the risk of onset in advance. It detects small or indistinct areas, improving the accuracy and efficiency of doctors’ readings.

Lunit INSIGHT generates revenue by charging fees when AI software is embedded in X-ray devices or when images are read through Picture Archiving and Communication Systems (PACS). Currently, it has contracts with GE Healthcare, Philips, Fujifilm, and supplies products to more than 600 medical institutions worldwide.

Lunit SCOPE is an image processing biomarker solution related to cancer treatment, used to predict the therapeutic response of immuno-oncology drugs. Although the immuno-oncology drugs currently in use show excellent efficacy, their response rate is low at 20-30%, meaning they work well only for some patients. Lunit SCOPE analyzes the immune cell patterns of cancer patients to predict the therapeutic response to immuno-oncology drugs, thereby increasing the number of patients who can be prescribed these drugs.

Lunit SCOPE has signed an exclusive contract with Guardant Health, the global leader in liquid biopsy. Guardant Health collaborates with about 70 of the global top 100 pharmaceutical companies, and 80% of oncologists in the United States use Guardant Health’s products.

Based on this technological capability, Lunit became the first domestic healthcare company to receive AA ratings from all evaluation agencies in the technology evaluation for KOSDAQ special technology listing. Currently, Lunit employs more than 10 full-time specialists in radiology, pathology, oncology, and family medicine, and more than half of its total workforce consists of research and development (R&D) personnel, continuously investing in securing technological capabilities.

Kim Taehee, a researcher at KB Securities, said, “Lunit is a company that has proven its technological capabilities by partnering with global top companies and publishing over 150 research results, including in prestigious medical journals such as JAMA Oncology and JCO.” However, he added, “The recent high market volatility and the fact that 44.2% of shares will be freely tradable immediately after listing pose risks.”

Lunit’s expected public offering price is 44,000 to 49,000 KRW, with the offering amount estimated at 53.4 billion to 59.5 billion KRW. The expected market capitalization after listing is 462.3 billion to 514.9 billion KRW. The offering price was calculated by applying the price-to-earnings ratio (PER) of comparable companies.

Last year, Lunit recorded sales of 6.6 billion KRW and an operating loss of 45.7 billion KRW. It is not yet profitable. Therefore, the PER was applied by converting future expected earnings into present value. Lunit is expected to turn a net profit in 2024 and record sales of 149.5 billion KRW and net profit of 58.3 billion KRW in 2025.

Of the funds secured through this offering, 26.4 billion KRW will be used for clinical approval costs. Lunit’s products must undergo phase 2 clinical trials to verify efficacy. Additionally, 18 billion KRW will be spent on data purchases for AI deep learning technology development, and 7.6 billion KRW will be allocated for securing personnel through new hires.

Meanwhile, Lunit plans to conduct demand forecasting for institutional investors on the 7th and 8th, finalize the public offering price, receive general subscriptions on the 12th and 13th, and aims to be listed in July. The lead underwriter is NH Investment & Securities.

This content was produced with the assistance of AI translation services.