HLB acquires in vitro diagnostic company

By Baek Byung-yeul

The local biotech company HLB acquired the local in vitro diagnostic company FA in a move aimed at diversifying its business portfolio and securing a sustainable profit, the company said Thursday.

HLB's board approved a plan to acquire a 100 percent stake in FA for 101.92 billion won ($86.7 million).

Established in 2003, FA manufactures and sells in vitro diagnostic tools, alcohol swabs, sanitizers and veterinary medicines. Its in vitro diagnostic medical devices are exported all over the world, including to the United States, Australia and European nations.

FA also manufactures household goods for major companies such as LG Household & Health Care, Yuhan Corporation and 3M. The company's corporate value has risen vertically since the outbreak of COVID-19. Its sales, which stood at 9 billion won in 2019, grew to 60 billion won in 2020 and are expected to surpass 120 billion won this year.

Once the necessary acquisition procedures are completed, FA will be incorporated as a subsidiary of HLB and its operating profit will be reflected in HLB's earnings from the first quarter of 2022.

HLB expects the FA acquisition to improve its cash flow significantly. The company will also receive royalties for its anticancer treatment Rivoceranib from Chinese pharmaceutical company Jiangsu Hengrui Medicine this year.

Jiangsu Hengrui Medicine holds the marketing rights to Rivoceranib in China, selling it there for gastric cancer treatment since 2014. In January, the company expanded the applications of the drug as a secondary treatment for liver cancer.

In addition, the ovarian cancer treatment Apealea will be sold in the U.K. and Germany starting next year. HLB's U.S. subsidiary Elevar Therapeutics secured the global rights for Apealea.

“Considering all these factors, the company expects it can improve its financial soundness including operating profit,” a company official said.