Recens Medical, which entered the stock market at the end of Mar., is accelerating its push into the global medical device market on the back of its "rapid-precision cooling technology."
But three consecutive years of operating losses and overhang pressure early in its listing remain variables. Attention is on whether a shift to a consumables-centered revenue model and product diversification will lead to a turnaround to profit next year.
◇ Cooling technology based on 150 patents… Volatility in supply and demand eased after listing
The company's core is a "cryogenic–thermoelectric hybrid cooling technology." The human body is vulnerable to heat but relatively resistant to cooling, making anesthesia, inflammation suppression, and drug delivery possible within specific low-temperature ranges. However, technology to control this quickly and precisely has been limited.
Recens Medical combined thermoelectric cooling with liquid nitrogen to overcome this limitation. Its strengths are a cooling speed of 100℃ per second and precision control of ±1℃. Related patents number more than 150.
The company said, "We understand there are no domestic or overseas firms yet developing similar cooling technology," and noted, "Even if a latecomer starts research now, it would take at least five years to catch up."
Based on this technology, Recens Medical listed on KOSDAQ on Mar. 31 at an offering price of 11,000 won. The opening price was 37,600 won, 3.4 times the offering price, and it climbed intraday to 39,900 won.
However, as institutions took profits en masse, the share price plunged to 17,550 won that day. In the first week of listing, institutions were net sellers of more than 330,000 shares, and net selling by foreigners and institutions continued thereafter.
The turning point came in mid-April. With foreign buying flowing in, foreigners and institutions turned to net buying on Apr. 23, and the share price jumped more than 20% in a single day. It continued to recover and closed at 31,000 won on the 5th of this month.
◇ Expanding sales focused on dermatology and veterinary medicine… Pushing to shift consumables share to 60%
The flagship products are "TargetCool" and "VetEase."
TargetCool is a handheld cooling device that reduces pain during dermatologic procedures, accounting for 68.2% of total sales (8.8 billion won) last year. Since its launch in Sept. 2022, it has entered 44 countries, with overseas sales making up 75%.
The company plans to shift the TargetCool sales mix, currently 63.5% equipment and 31.4% consumables, to 40% equipment and 60% consumables by next year. Since Aug. last year, it has internalized part of the cartridge production process, cutting costs by more than 50%, in the same vein.
VetEase is equipment for pet dermatologic conditions and drug delivery. In Korea, it gained a foothold in the market through a consignment sales contract with Yuhan, and later expanded into four countries—Japan, Thailand, Hong Kong, and China.
It accounted for 25.8% (2.27 billion won) of total sales last year, about 8.6 times higher than the previous year (240 million won). Starting this year, the company plans to accelerate entry into the United States and Europe, which are large markets.
Recens Medical's mid- to long-term growth engine is "OcuCool." It is a device that reduces pain through cooling during intravitreal injection (IVT) procedures used to treat macular degeneration and diabetic retinopathy, featuring shorter procedure times than conventional chemical anesthesia (5–15 minutes).
Above all, in 2023 it received De Novo approval from the U.S. Food and Drug Administration (FDA). That means it was recognized as the world's first ophthalmic cooling anesthesia device. Its current revenue contribution (26 million won) is low, but the possibility of collaboration with global pharmaceutical companies is being discussed.
The company said it is developing a product that combines cooling anesthesia and the procedure into one ("OcuCool All-in-One") and added it will begin technology transfer talks with global pharmaceutical companies starting next year.
Beyond that, the company is expanding its pipeline, starting with the launch of a home beauty cooling device in the second half, followed by a precision cooling device for hair loss treatment, a cooling therapy device for diabetic skin, and a drug delivery device for burn treatment.
◇ Targeting 8.2 billion won in operating profit next year… MOQ fulfillment rate and overhang pressure are variables
Expectations for growth are high, but there are plenty of challenges to solve.
Triple-digit losses continue, with operating losses of 12.6 billion won in 2023, 14.2 billion won in 2024, and 10.6 billion won in 2025.
Recens Medical has presented a goal of achieving 29.1 billion won in sales and 8.2 billion won in operating profit next year to turn a profit. To do so, sales would need to surge from 8.8 billion won last year to 19.1 billion won this year and 29.1 billion won next year.
The basis for this estimate is minimum order quantity (MOQ) contracts signed with customers. Recens Medical has contracts that set MOQs on a quarterly or annual basis, and it calculated sales by applying the fulfillment rate—cumulative sales divided by cumulative MOQ in the past—to future contracted volumes.
However, according to the securities registration statement, TargetCool's fulfillment rates by customer range widely from 10.55% to 322.68%.
Short-term volatility also remains. On the 31st of this month, 1,246,456 shares (11.5%) with a two-month lockup and, on July 1, 1,565,648 shares (14.4%) with a three-month lockup are scheduled to be released from protection, creating selling pressure.
The company emphasized achievability, saying it presented its performance targets conservatively. It also said concerns about an overhang are not significant.