Lunit Reassessed as an “AI Drug-Development Company”... “Lunit SCOPE Valued at 500 Billion Won” [Stock NOW]

[Financial News]  NH Investment & Securities analyzed that Lunit may be revalued from an AI medical imaging diagnostics company to a company in the AI drug-development value chain.
Particular attention was paid to the growth potential of Lunit SCOPE, its AI pathology diagnostics and biomarker business, and to expanded collaboration with global pharmaceutical and research-platform companies.
On the 26th, NH Investment & Securities named Lunit as a company to watch in South Korea’s AI healthcare sector next year. It did not issue a separate investment rating or target price.
Han Seung-yeon, an analyst at NH Investment & Securities, said the market should pay attention not only to Lunit’s core cancer screening business but also to SCOPE’s potential value.
SCOPE uses AI to analyze pathology images, identify biomarkers associated with responses to cancer treatments, and distinguish patient groups that are more likely to respond in clinical trials. Unlike Lunit’s existing imaging diagnostics business, which supports cancer diagnosis at medical institutions, it supports pharmaceutical companies’ decisions on new drug development, giving it a different business scope and customer base.
Recent collaborations with global companies were also cited as examples of the business’s potential to expand. On the 24th, Lunit announced a collaboration with Summit Therapeutics on AI pathology biomarker research for the development of the immuno-oncology drug ivonescimab.
The aim is to use SCOPE IO to analyze the characteristics of the tumor microenvironment, identify biomarkers, and distinguish patient groups. In September, Lunit also announced a collaboration with 10x Genomics, a single-cell and spatial biology analysis platform company. The collaboration was seen as significant because Lunit’s partners have expanded beyond pharmaceutical companies to include research equipment and platform companies.
NH Investment & Securities estimated SCOPE’s business value at at least 500 billion won. The estimate applies an approximately 13-times revenue multiple derived from the acquisition of digital pathology platform company Proscia by global diagnostics company Agilent.
The analyst forecast that “SCOPE revenue will rise from approximately 10 billion won last year to 17 billion–20 billion won this year and 35 billion–50 billion won next year,” adding that “if the company succeeds in commercializing companion diagnostics (CDx) in the future, each product could generate additional annual revenue of 40 billion–50 billion won.”
He added that “there are no examples yet of AI biomarkers being commercialized, leaving uncertainties around test prices, the number of eligible patients, and revenue sharing with partners.”
The existing screening business was also cited as a source of growth. NH Investment & Securities expects Lunit’s screening business to generate approximately 90 billion won in revenue this year. Growth drivers include recurring revenue from Volpara and increased sales of INSIGHT to existing North American customers.
It also projected that Lunit could turn adjusted EBITDA positive this year on a cash-cost basis if cost savings from organizational integration and workforce adjustments are added.
However, financial pressure remains a variable. NH Investment & Securities estimated the principal remaining on convertible bonds (CBs) at approximately 60 billion won and cash-like assets at approximately 70 billion won, and noted that additional financing may be needed when accumulated interest and working capital are taken into account.
If financing takes place, it could cause short-term share dilution. However, the analysis said that securing the funds needed to repay the remaining CBs and reach the breakeven point, thereby reducing financial uncertainty, could instead bring the growth potential of Lunit’s core business and SCOPE’s value into sharper focus.
[email protected] Kang Jung-mo Reporter