On the 29th, Applied BioCode (ABC-KY) announced during an investor meeting that its diverse range of diagnostic products, including the "17-target Gastrointestinal Pathogen Panel (GPP)," "20-target Respiratory Pathogen Panel (RPP)," and "COVID-Flu-Plus 7-in-1 Test," have all received unique insurance codes (Z-Codes) from U.S. insurance institutions. This achievement is expected to significantly enhance the company’s future market share.
Previously, Applied BioCode’s customers primarily used general CPT codes to apply for insurance reimbursements when utilizing the company’s diagnostic products. With the new Z-Code, a specialized and dedicated insurance code, customers can now access quicker reimbursements, which is supported by many leading insurance companies. This new code is likely to increase customer adoption of Applied BioCode's products.
Applied BioCode reported strong growth momentum in its core business areas, particularly in its in vitro diagnostic (IVD) reagents and digital biocode (BMB) technologies.
Diagnostic Reagents and Partnerships Drive Expansion
In the diagnostic reagents sector, products such as the "STI + AMR (Sexually Transmitted Infection combined with Antimicrobial Resistance Testing)" and "UTI + AMR (Urinary Tract Infection combined with Antimicrobial Resistance Testing)," along with the MDx3000 testing system integrated with the KingFisher extraction system, the most widely used instrument in U.S. laboratories, are set to accelerate the company’s expansion into major laboratories across the U.S.
The digital biocode (BMB) technology is also showing robust growth. Notably, Applied BioCode has established collaborations with major players like Idexx, the world’s largest veterinary diagnostics company, and China’s leading autoimmune diagnostics company, Livzon Reagent. This year, Applied BioCode also added a partnership with Exact Sciences, an international leader in early cancer detection, to leverage BMB’s multi-detection capabilities for cost-effective applications in genomics and proteomics (multi-omics).
In the first half of this year, Applied BioCode reported revenues of NT$183 million, marking a 13.6% year-over-year increase. The core businesses of digital biocode (BMB) and multi-diagnostic reagents (IVD) together contributed NT$180 million, accounting for 98% of the total revenue, with a year-over-year increase of 16.8%. The gross margin was 61.9%, up by 5.8 percentage points. Despite a post-tax loss of NT$113 million and a per-share loss of NT$1.38, the company remains on track towards reducing losses and achieving profitability.
Outlook for the Second Half of the Year and New Product Launches
Looking ahead to the second half of the year, Applied BioCode's diagnostic reagents and automated instruments have already been adopted by national laboratories in the U.S. and are currently undergoing large-scale sample testing. The GPP is expected to be the main sales driver, with the RPP also gaining new key customers since August. Demand is anticipated to stabilize in the fourth quarter as more laboratories complete their validations.
Additionally, the company is preparing to submit an application to the U.S. FDA for the MDx3000 + KingFisher (Flex/Apex) system. The review process is expected to take 90 working days, starting with the GPP, followed by the RPP. Upon approval, this system is anticipated to be a new growth driver in 2025.
The KingFisher extraction system, which has had thousands of installations in U.S. laboratories since the COVID-19 pandemic, is the market leader in its segment. Once the MDx3000 + KingFisher system receives FDA approval, it will shorten the time required for laboratories that already have KingFisher installed to integrate Applied BioCode's products, while also ensuring the FDA-backed quality of the products.
New Diagnostic Tests and Market Differentiation
In terms of new diagnostic tests, Applied BioCode is developing products like the STI + AMR (Sexually Transmitted Infection combined with Antimicrobial Resistance Gene Testing), the first single platform that combines infectious disease detection with bacterial resistance. This product is currently being developed in collaboration with public health laboratories and is in discussions with the U.S. FDA for clinical trial promotion. The UTI + AMR (Urinary Tract Infection combined with Antimicrobial Resistance Gene Testing) is also under development, aiming to be the first of its kind on the market and targeting FDA approval in the U.S.
Beyond product development and market differentiation, the U.S. FDA has recently decided to regulate all Laboratory Developed Tests (LDTs), a move that is expected to benefit Applied BioCode and support its business growth.
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