As the era of treating and managing Alzheimer's disease, which accounts for about 70% of all dementia, opens, the role of brain imaging artificial intelligence (AI) corporations is rapidly growing. The market is evolving beyond simple diagnostic support to the stage of determining whether to administer therapeutics, tracking side effects, and even quantitatively analyzing treatment effects.
In Korea, Neurophet, a brain disease AI startup, is considered a leading player. The company was founded in 2016 by co-CEOs Bin Jun-gil and Kim Dong-hyeon, who developed the next-generation neuro-navigation system at Gwangju Institute of Science and Technology (GIST).
Marking its 10th anniversary this year, the company has accelerated its business after successfully developing and commercializing an Alzheimer's therapeutic analysis solution and an electrical-stimulation-based stroke rehabilitation device. It listed on KOSDAQ last year.
Notably, following expanded collaboration with global big pharma such as the U.S. Eli Lilly and Company and Switzerland's Roche, the company is also pursuing new projects with major U.S. hospitals.
On the 13th, at Neurophet's headquarters in Gangnam-gu, Seoul, Bin Jun-gil, CEO of Neurophet, told ChosunBiz, "We are pushing a new diagnostic technology project with top U.S. hospitals based on demand from global big pharma."
Bin said, "The request for this project first came from global big pharma, and based on that, we planned it with a U.S. hospital," adding, "Proceeding has been decided, and after the contract procedures, we aim to unveil the project in the summer this year."
"This project is meaningful in that from the technology development stage it is linked to an actual demand source (a medical institution)," he said, adding, "The recent paid-in capital increase also largely serves as investment for expanding global projects and accelerating overseas business." Last month, the company decided on a third-party allotment paid-in capital increase (issuance of convertible preferred shares) worth about 16 billion won.
◇ Blooming of dementia therapeutics…attention on moving beyond collaboration with big pharma to "commercialization contracts"
Behind Neurophet's recent attention in the market is the blossoming of the Alzheimer's treatment market.
Whereas dementia drugs had long been limited to alleviating symptoms, the emergence of therapies that remove amyloid beta—such as Japan's Eisai and U.S. Biogen's "Leqembi" and Eli Lilly and Company's "Kisunla"—is changing the treatment paradigm.
The issue is side effects. Because brain edema (ARIA-E) and microhemorrhages (ARIA-H) may occur during treatment, repeated MRI readings and precise monitoring are required.
Here, Neurophet's AI solution is used. Neurophet's "AQUA AD" uses AI to analyze MRI and PET images to conduct everything from pre-treatment suitability assessments and post-treatment side effect tracking to analyses of amyloid reduction.
Bin said, "We quantify even the number of microhemorrhages and the location and size of edema to aid clinical decision-making," adding, "It is becoming more useful in the process of determining whether to continue or stop the therapeutics."
In particular, its competitiveness is cited in its ability to go beyond simple side effect detection to analyzing treatment effects. Bin said, "Among major players in the global market, there are not many that can analyze the amount of amyloid reduction," adding, "As the era of therapeutics opens, a new opportunity has arisen for Neurophet, a latecomer."
Neurophet is currently conducting collaborative projects with several global big pharma. With Eli Lilly and Company, two projects have been carried out: an analysis verification project using Lilly's clinical data and a project to implement automation of its proprietary analysis method. It is also conducting verification work based on clinical data with Roche.
On the status of the collaborative businesses, Bin said, "We have completed the Lilly project through to the results announcement and will soon hold our first commercialization meeting with the global headquarters."
He said, "The very fact that we shared and directly verified clinical data rigorously managed by big pharma is a signal of technological demand," adding, "This year's key goal is to develop collaborations with big pharma into actual commercialization contracts, beyond simple joint research."
◇ "Full-scale expansion of overseas business this year"
The company is expanding its overseas business in earnest this year.
In the United States, it is pursuing both direct sales and partnership strategies centered on its local subsidiary. Bin said, "We are in talks on collaboration with local medical device companies."
He explained, "Our strategy is to work with No. 1 local market share players that already have a customer base, rather than simple distributors," adding, "We will supply Neurophet solutions as add-ons without clashing with existing product lines."
It is also picking up speed in targeting the Japanese market. In Japan, hospitals often procure devices through medical device supply providers (MSPs) rather than purchasing directly. Neurophet is expanding its market by building a collaboration network with the No. 1 MSPs in Japanese regions.
Bin said, "We are expanding our contract scope from Hokkaido and Tohoku to the Kansai, Kyushu, and Tokyo regions." It has also secured supply cases at major Southeast Asian hospitals, including Singapore General Hospital (SGH). Neurophet's overseas sales accounted for about 29% last year.
◇ "The fallout from the doctor-government conflict was significant…but we are shifting to a subscription-based revenue model"
The company directly experienced the fallout from the doctor-government conflict ahead of its listing. It said that right before the listing push last year, delays in university hospital contracts and medical device investment schedules disrupted the listing timeline and funding plans. Bin recalled, "It was a very difficult period as the listing schedule and funding plans became tangled in succession."
Still, this served as a catalyst for changes in how domestic hospitals purchase. Bin said, "Whereas more than 90% of university hospitals previously made one-time purchases, recently the share of subscriptions has risen to about half," adding, "For hospitals, the initial investment burden is reduced, and for corporations, a base of recurring revenue is created."
Even amid these environmental changes, Neurophet is speeding up commercialization of new products. Neurophet's founding team originally conceived "electrical stimulation therapy" as its first business item rather than imaging diagnostics.
In July last year, the company commercialized an AI-based personalized electrical stimulation therapy solution, and after being designated an innovative medical technology, non-reimbursable claims also became possible. Adoption is expanding at university hospitals, mainly in the field of upper-limb stroke rehabilitation.
Bin said, "Technology we developed from the early days of founding is being used to treat actual patients after 10 years," adding, "While the listing is meaningful, as a founder I was most proud that treatment had actually begun in clinical settings."
Neurophet is now focusing on developing a next-generation platform that combines blood-based biomarkers with brain imaging data. Bin said, "If we combine blood data with brain image analysis, we can further improve the accuracy of precision diagnosis and new drug development," adding, "We will grow our global business performance through technology development based on big pharma demand and expansion of overseas business."