Boditech will dominate the POCT market with its AFIAS platform

In developed markets, especially those of Japan, USA and EU, medical organizations and practitioners are reputed for being conservative, and changing suppliers or adopting new technologies for medical procedures is a difficult challenge to overcome for new products and companies. How are you working to overcome this barrier? To what extent can we consider that this challenge is a matter of reputation vs a matter of technology?

As you rightly pointed out, healthcare professionals tend to be conservative, often hesitating to adopt new technologies unless they see others doing so. Within the diagnostic market, we can distinguish between two primary components: biomarkers, such as cardiac and cancer biomarkers, and instruments. Some companies specialize in discovering novel and more precise markers, while others focus on developing platform technologies that enable faster, easier, more cost-effective, and user-friendly detection or analysis of these markers. Larger global companies typically possess capabilities in both areas, offering both new biomarkers and advanced platform technologies.

My strategic focus has always been on discerning the most effective direction for our company. Should we concentrate on uncovering unique biomarkers that differentiate us from competitors, or should we emphasize the development of instruments and equipment that are more accessible, affordable, and efficient? Over the past two decades, Boditech has primarily emphasized platform technology and the creation of machines that are cost-effective, compact, and rapid. However, we've encountered formidable competition from Chinese firms, particularly in terms of manufacturing efficiency and cost competitiveness.

Recognizing the need to adapt, I've spent the last three years exploring strategies to compete with these Chinese counterparts. Chinese companies excel in manufacturing systems, resulting in significantly lower costs. Consequently, I concluded that our best strategy lies in focusing on areas where Chinese competitors have yet to establish dominance, namely, the development of new biomarkers. Thus, we've embarked on an extensive search for novel biomarkers, not only within Korea but also internationally. Recently, we partnered with two German companies, SphingoTec and 4TEEN4. These collaborations have enabled us to acquire licenses for two promising biomarkers: one for kidney health, specifically Acute Kidney Injury (AKI), and another for cardiogenic markers, offering rapid testing for heart attacks. Additionally, we're collaborating with a Taiwanese company that has discovered a rapid biomarker for diabetes.

As a result, our company is now more strategically focused on acquiring and leveraging new biomarkers that provide a competitive edge against our rivals.

In the past, testing and treatment were distinctly separate processes. However, with the emergence of companion diagnostics, there's a convergence between diagnosis and treatment. For diseases like cancer, early testing and diagnosis significantly enhance the chances of successful treatment. Even in the case of HIV, early diagnosis coupled with the timely application of antiviral medication has resulted in documented cases of remission, previously achievable only through bone marrow transplants. How crucial do you believe the innovations in the testing industry are for impacting patient outcomes in the long term?

Indeed, within academic literature and professional conferences, we witness a plethora of innovative technologies emerging. The challenge within the industry lies in translating these advancements into practical applications within the medical field. Despite numerous groundbreaking discoveries and developments, only a fraction find their way into mainstream medical practice. This conservatism among physicians towards adopting new technologies, biomarkers, and treatments stems from the limited applicability of many innovations in real-world medical settings. This phenomenon is particularly pronounced in Korea, where medical practitioners exhibit a high degree of conservatism.

Moreover, gaining regulatory approval presents a significant hurdle, both in Korea and globally. Securing government agency approval is a prolonged and costly process, even for medical devices, which are generally less expensive than pharmaceuticals. While medical devices entail lower costs compared to drugs, the expenses associated with clinical testing can still run into millions of dollars. Unfortunately, our resources are limited, and investing millions in testing isn't feasible for us. However, the development of new biomarkers is a costly endeavor that demands significant financial investment.

When discussing testing, it's not just a matter of determining positive or negative results; it also involves monitoring the evolution of a condition. How are you adapting to the need for continuous testing in patient care, and how does this demand influence your approach to developing new products?

I understand your reference to companion diagnostics. One aspect of this is therapeutic drug monitoring, where we track how medication evolves within the body and assess its ongoing efficacy. However, there are relatively few diagnostic products designed for monitoring and following up on drug treatments. For instance, only a limited number of anti-cancer drugs offer this capability. Another scenario arises when certain drugs need to be maintained within a narrow range in the body; exceeding this range can lead to complications, while falling short of it can result in fatalities. While there are monitoring systems available for some cases, the majority of testing remains one-time events without continuous follow-up.

However, there is a notable exception with the introduction of continuous glucose monitoring (CGM). This technology allows individuals to attach small devices to their arms, enabling the continuous monitoring of glucose levels as they consume different foods.

In recent years, the Korean government has made significant strides in bolstering support for the medical device industry, unveiling its inaugural comprehensive plan aimed at positioning Korea as the fifth largest global exporter of medical devices. From your perspective, how do you assess the current ecosystem in Korea? Do you believe the ambitious goal of achieving fifth place within the next decade is realistic?

It's a complex issue with both affirmative and cautious aspects. Regarding the first question, while I believe Korea possesses immense potential to realize this goal, there are formidable challenges to contend with. Compared to other nations, Korea boasts an extensive array of manufacturing facilities and resources readily available domestically. For instance, nearly all the components necessary for our diagnostic devices and machines can be sourced within Korea. Additionally, the capacity to locate multiple companies capable of manufacturing and assembling a single device underscores the robustness of our manufacturing ecosystem.

However, despite the government's proclamation of its ambitious goal, navigating regulatory hurdles in Korea poses a significant obstacle. Regulatory frameworks are becoming increasingly stringent, hampering the agility necessary for industry innovation and growth. We find ourselves caught in a paradox: while Korea boasts abundant resources and skilled personnel for manufacturing new instruments, the regulatory landscape remains rigid and resistant to change, despite assurances from political leaders to the contrary.

Moreover, Korean doctors exhibit considerable reluctance towards embracing new technologies, further impeding the adoption and utilization of innovative medical devices. Additionally, regulatory constraints within the insurance system engender a risk-averse culture among insurance companies, disincentivizing the exploration of novel approaches or technologies.

Every nation faces its own set of challenges, and Korea is no exception. While we possess the advantage of comprehensive domestic resources, regulatory stringency surpasses that of many European counterparts. This disparity underscores the need for concerted efforts to strike a balance between fostering innovation and ensuring regulatory compliance.

Given Boditech's focus on diagnostic machines since the early 2000s, and considering the trends toward miniaturization, portability of diagnostic equipment, and increased AI implementation across various fields, what do you envision as the future of point-of-care technology, especially considering the potential of the Korean industry? What technological advancements do you anticipate, and what factors will drive market growth domestically and internationally?

Boditech remains steadfast in its commitment to point-of-care testing. From my perspective, the future of diagnostics lies precisely in this domain. Currently, we lack truly exceptional technology that can extract comprehensive information from a single drop of blood. However, this direction is crucial for the evolution of our healthcare systems. We require technologies capable of effortlessly monitoring blood parameters and providing insights into our physiological well-being. This is precisely why I am deeply invested in advancing point-of-care testing, a focus we've maintained for the past 26 years. I firmly believe that the future holds great promise in this area.

Moreover, the COVID-19 pandemic has underscored the importance of rapid testing and home-kit diagnostics. The heightened awareness regarding the necessity of home testing presents Boditech and other companies with significant opportunities. Moving forward, I anticipate a growing interest in decentralized healthcare solutions. 

Globally, governments are acknowledging that diagnostic tests don't always require the facilities of large hospitals. This new perspective paves the way for different testing locations, like pharmacies, offering over-the-counter services that are both more accessible and economical. Plans are in place to train clinical pharmacists with advanced skills, enabling them to administer vaccines, conduct tests for flu and infectious diseases, and manage conditions such as diabetes and hypertension. Moreover, there's a noticeable shortage of physicians in remote and underserved areas.

For instance, in countries like the United States, Canada, and parts of Southern Europe, including Brazil, policymakers are exploring new models for healthcare delivery. In Brazil, a recent legislative change has expanded the role of pharmacists to encompass clinical duties traditionally performed by doctors. These clinical pharmacists now administer vaccinations, conduct flu and infectious disease tests, and manage chronic conditions like diabetes and hypertension. This shift is particularly crucial in remote areas where access to medical professionals is limited.

Similarly, in the United States and Canada, there is a growing consideration to empower pharmacists to conduct certain diagnostic tests, such as flu screenings. In Southern European countries like Italy and Spain, pharmacists have been authorized to perform tests for conditions like prostate cancer and diabetes, albeit limited to fingertip blood tests. This transformation highlights the evolving role of pharmacists in the healthcare landscape and reinforces the importance of point-of-care testing beyond traditional clinical settings.

In conclusion, the future of diagnostics lies in the expansion of point-of-care testing beyond clinics and hospitals. The shift towards decentralized healthcare delivery models presents a significant opportunity for market growth both domestically and internationally. As technology continues to advance, I am optimistic about the pivotal role that Boditech and other innovative companies will play in shaping the future of diagnostics.

The concept of point-of-care testing is relatively novel in Europe and the U.S. compared to Asian markets. How do you foresee this trend evolving in these regions, and do you believe Europe and the U.S. will become as receptive?

As I mentioned, Europe and the U.S. exhibit greater flexibility in adopting new technologies compared to Asian countries. While I wouldn't characterize Korea and Japan as resistant, they tend to observe developments in the United States and Europe before taking action. Consequently, Korea and Japan may lag behind in terms of embracing innovation.

Ideally, we should swiftly leverage any new technology developed, but Japan and Korea tend to adopt a wait-and-see approach, deferring to more advanced nations. Additionally, regulatory processes differ significantly between Europe and the United States. The FDA in the U.S. mandates multiple rounds of clinical tests and extensive documentation, often amounting to hundreds of pages. Conversely, Europe operates under a simpler regulatory framework, managed not by the government but by private entities. This difference in approach reflects distinct philosophical perspectives. Europe's stance is characterized by a willingness to swiftly adopt new technologies, albeit with stringent penalties in case of mishaps, emphasizing accountability.

For example, SphingoTec, a German company, offers penKid, a biomarker, while we provide the detecting system. We plan to integrate this biomarker into our system and introduce it first in Europe, where regulations are conducive to innovation.

In summary, Europe's regulatory environment is more innovation-friendly compared to the U.S., facilitating the introduction of new technologies. However, sales and marketing dynamics present separate challenges. Nevertheless, products manufactured in the U.S., Korea, and Japan can find receptive markets in Europe. Overall, Europe's adaptable approach and openness to innovation bode well for companies seeking to introduce novel technologies.

Regarding Europe, you currently have over 300 certified products, and in 2022, Boditech Med secured a $19.2 million supply agreement with A. Menarini Diagnostics, a subsidiary of the prominent Italian pharmaceutical company, for the next three years. Given this context, where do you perceive new opportunities emerging in Europe?

Historically, China constituted the largest market for Boditech. A decade ago, 60-70% of our total revenue originated from China. However, in recent years, China's share has dwindled to just 10% of our overall sales. Conversely, Europe has emerged as our primary revenue generator, with sales reaching $23 million last year. This shift can be attributed to two key factors. Firstly, Boditech specializes in point-of-care testing, a niche market largely overlooked by other global players like La Roche or Siemens. Moreover, certain European countries, such as Italy, demonstrate a keen interest in point-of-care testing, presenting significant opportunities for expansion.

However, France presents a unique scenario. The French medical system diverges substantially from that of Germany. While German physicians embrace blood testing, French doctors are prohibited from conducting such tests and must refer patients to laboratories. These labs, particularly in France, utilize automated analysis devices from companies like La Roche, given their high patient volume. Contrastingly, German doctors send blood samples to labs, resulting in longer wait times for results. Point-of-care testing offers a solution, allowing patients to undergo blood tests in the presence of their physician and receive results within 10-20 minutes. This immediate feedback facilitates prompt prescription and treatment, eliminating the need for extended waiting periods.

In essence, Europe, particularly markets receptive to point-of-care testing like Italy, presents significant growth opportunities for Boditech. However, navigating distinct healthcare systems, such as those in France and Germany, requires tailored strategies to capitalize on emerging trends and preferences.

Which regions do you expect will be key drivers in the global diagnostics market?

Our strategic focus is on immuno-diagnostics, with a specific emphasis on expanding our capabilities in chemistry and blood sample collection. To support this growth, we're investing in our R&D department by hiring additional personnel and acquiring ten innovative startups. These efforts are aimed at bolstering our diagnostic solutions to meet global demands effectively.

AFIAS-10 and iChroma III

Can you compare your company's growth and strengths with those of your competitors?

Certainly. In the realm of developing countries, our ICHROMA products have established a significant presence due to its adaptability and efficiency. Conversely, in more developed markets, our AFIAS products  are making notable inroads, currently claiming a 10% market share with the potential to escalate to 50%. The demand for automated and sophisticated systems in developing countries is also on the rise, positioning us favorably against competitors.

Could you provide more insights into your partnership with 4TEEN4?

Our collaboration with 4TEEN4, a German entity specializing in diagnostic and therapeutic biomarkers, is particularly exciting. We are focusing on the DPP3 biomarker, which plays a critical role in predicting and monitoring cardiogenic shock in patients with acute coronary syndrome and heart failure. The goal of this partnership is to establish DPP3 as a ubiquitous diagnostic tool for emergency cardiac care, leveraging its ability to offer quick and precise results, which are crucial in urgent care settings.

What are Boditech's strategic plans for the US market in 2024, especially considering the FDA approval of your COVID-19 home test kit?

The acquisition of Immunotics was a strategic move to facilitate FDA approvals, setting a foundational step in our US market strategy. Over the pandemic, we prioritized refining our AFIAS platform's performance and expanding its patent portfolio. Our focus is now on navigating the unique challenges of the US market, like the intricacies of blood sample collection and the nuanced demands of vitamin D diagnostic products due to the differential sunlight exposure across hemispheres.

Looking forward, how do you envision the evolution of the healthcare market, and what are Boditech's objectives in this landscape?

We are aiming to double our sales and are in the process of developing innovative miniature devices suitable for home use. Our ambition is to set ourselves apart in the market by providing products with unmatched sensitivity and specificity. By doing so, we aim to address the dynamic needs of the healthcare sector, ensuring our position as a leader in providing advanced diagnostic solutions.

For more details, explore their website at https://www.boditech.co.kr/en