Published 22 Jun.2021 09:20(KST)
[Asia Economy Reporter Park Hyungsoo] "The second factory can produce about 1,100 units per month of innovative spinal implants. We have achieved process optimization that increases production volume while lowering manufacturing costs. We also have research and development (R&D) facilities in place, enabling us to quickly respond to various customer needs."
Son Woo-geun, Head of Division (Factory Manager), did not hide his pride while introducing the equipment at the second factory, which produces innovative spinal implant products approved for sale by the U.S. Food and Drug Administration (FDA). Son said, "We conduct inspections on all products before shipment," adding, "Since these products are implanted in the human body, we cannot allow a single defective product to leave the factory."
L&K Biomed is a company specializing in the development and manufacturing of spinal implants among orthopedic medical devices. It was established in December 2008. Spinal implants are medical devices necessary for spinal fusion surgery, the standard surgical method for treating spinal diseases such as degenerative spinal disorders, spinal fractures, scoliosis, and cervical disc herniation. L&K Biomed launched its products domestically in 2009 and received FDA certification for spinal fixation implant products the following year.
After holding the completion ceremony for its second factory last month, L&K Biomed hosted events every Thursday for four weeks, inviting shareholders and investors to introduce its production facilities. The management believes that transparently disclosing information, given their world-class spinal implant production technology, will help the company receive proper valuation.
Looking at semi-finished products coming out of the computer numerical control (CNC) lathe inside the factory, Head Son emphasized, "Without inputting precise data values, products cannot be made," and added, "We directly manufacture and supply not only spinal implants but also the tools required to implant them into the body, which results in high customer satisfaction."
He continued, "In the past, products were made from plastic materials, so they were not sturdy," explaining, "The products developed by L&K Biomed use titanium, making them strong and height-adjustable, which greatly enhances convenience."
After the equipment introduction, a Q&A session followed. Vice President Park Jong-ik, who led the factory line tour, said, "Given the recent increased stock price volatility, we felt a heavy burden in inviting shareholders and institutional investors to disclose our facilities," adding, "In difficult times, it is essential to conduct bold and honest investor relations (IR) activities to gain trust from investors."
He further stated, "We understand that investors were disappointed due to delays in the main contract after signing a memorandum of understanding (MOU) with a global medical device distributor," emphasizing, "However, there has been no change in the company's fundamentals, and we continue to take steps toward sustained growth."
L&K Biomed is expanding its influence in the world's largest medical device market, the United States, leveraging its technological capabilities. A company official said, "Competitors who previously dominated the market want to delay L&K Biomed's entry through litigation," adding, "As the number of surgeries using our innovative products has exceeded 700, competition and scrutiny have intensified," and noted, "There is a growing trend among doctors to recognize L&K Biomed's technological capabilities, which has also increased competitive pressure."
Despite lawsuits, L&K Biomed recently secured an opportunity to supply products to U.S. Veterans Affairs (VA) hospitals. Last month, through its U.S. subsidiary, it signed a vendor contract with MSOT (Medical Solution of Texas), one of the procurement agencies under the U.S. Department of Veterans Affairs. VA hospitals serve military personnel and their families, with over 1,600 hospitals nationwide. The total annual budget for VA hospitals reaches 100 trillion won. In the U.S., where military personnel are highly respected, supplying medical devices to VA hospitals is impossible without trust in technological capability. Before L&K Biomed signed the contract, global medical device companies Medtronic and Stryker were responsible for supplying spinal implant products. This contract has laid the groundwork for L&K Biomed to stand shoulder to shoulder with medical device companies with market capitalizations around 10 trillion won.
Vice President Park said, "Due to the nature of VA hospitals, the proportion of spinal implant insertion surgeries is likely higher than in private hospitals," and added, "L&K Biomed earned the supply qualification after more than five years of effort." He also emphasized, "While three companies supply existing products, L&K Biomed supplies the innovative titanium-based height-adjustable products," and stated, "We will use VA hospitals as a foothold to expand into private general hospitals across the U.S."
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