Daesung Microbiological Labs

Daesung Microbiological Labs was founded in 1968 and listed on KOSDAQ in 2000 as a veterinary vaccine and pharmaceutical specialist.

The company produces and sells more than 150 types of veterinary medicines including vaccines, antibiotics, dewormers, nutritional supplements, antipyretic and anti-inflammatory agents, immune boosters, and disinfectants, with the sustained-release PPS injection among its key products.

Korea's animal pharmaceutical industry is heavily influenced by livestock population trends and disease outbreaks, and it remains a fragmented, competitive market with many manufacturers and importers.

Domestic competitors include listed animal-health companies such as Choong Ang Vaccine Laboratories, Eagle Vet, Komipharm, and CTC Bio.

On March 10, 2026, Insilico signed an agreement to acquire a 38.6% stake (1,466,740 shares) in Daesung Microbiological Labs for 11,000 won per share, totaling 16.1 billion won, becoming the controlling shareholder.

This price reportedly reflected a control premium of about 1.74 times the market price at the time of the deal. The acquisition was led by Insilico CEO Choi Seung-hoon, a KAIST-trained biophysical chemist who previously researched molecular modeling and AI-based materials design at Samsung SDI.

Alongside the acquisition, Insilico brought in new board members including Dr. Shin Jae-min, a former U.S.

National Institutes of Health researcher, former Seoul National University professor Choi Yoon-jae from the Department of Agricultural Biotechnology, and professor Kang Sang-ki from Seoul National University's International Graduate School of Agricultural Technology, aiming to strengthen R&D capabilities.

Consolidated revenue in 2025 rose to 25.99 billion won from 23.80 billion won in 2024, and operating profit turned to 714 million won, reversing the prior year's operating loss of 1.55 billion won.

Net profit attributable to owners also swung to 598 million won from a net loss of 1.77 billion won in 2024, with operating margin improving to 2.7% from -6.5%.

In 2023, revenue was 25.56 billion won with an operating loss of 689 million won and a net loss of 680 million won, while in 2022 revenue reached 25.50 billion won with an operating loss of 328 million won even as net profit came in at 1.70 billion won—a gap between operating and net results that suggests a non-operating, likely one-off item, though the specific details are not confirmed.

Operating cash flow stayed positive at 1.41 billion won in 2025 and 2.10 billion won in 2024, but was negative at -1.23 billion won in 2023.

On a quarterly basis, second-quarter 2025 revenue was 6.69 billion won with operating profit of 728 million won, yet net profit attributable to owners was a loss of 134 million won; the third quarter posted the strongest results in this window, with revenue of 7.18 billion won, operating profit of 591 million won, and net profit of 753 million won.

The fourth quarter saw revenue of 6.92 billion won and an operating loss of 270 million won, though net profit stayed positive at 243 million won.

Revenue then declined to 5.08 billion won in the first quarter of 2026 with the operating loss widening to 516 million won, and second-quarter revenue was 6.01 billion won with an operating loss of 472 million won, marking two consecutive quarters of operating losses. Net profit attributable to owners for these two 2026 quarters has not yet been disclosed.

Korea's animal pharmaceutical industry is shaped by stagnant livestock populations, with growth largely determined by disease outbreaks and disease-control demand.

During the 2025-2026 winter season, three major livestock diseases—highly pathogenic avian influenza, African swine fever (ASF), and foot-and-mouth disease—spread simultaneously, an unusual situation that had not occurred between 2019 and 2024.

In fact, in 2026 ASF cases reached 22 within less than three months, a record high, while foot-and-mouth disease occurred for a second consecutive year following 2025.

Such disease spread can stimulate demand for disease-control products and vaccines, but it can also burden the broader industry through weaker livestock farm economics and rising meat and dairy prices.

The global veterinary vaccine market is projected to grow from $8.12 billion in 2022 at a compound annual growth rate of 5.9% to $10.81 billion by 2027.

However, this market remains dominated by global majors such as Zoetis, Merck, Boehringer Ingelheim, Elanco, and Virbac, which together hold a 75-80% share, while domestically, numerous smaller players including Choong Ang Vaccine Laboratories, Eagle Vet, Komipharm, and CTC Bio compete for the remainder.

Government support policies for veterinary pharmaceuticals and a rising trend in export value are cited as medium-to-long-term growth opportunities for domestic companies.

The new controlling shareholder, Insilico, has stated its intent to combine Daesung Microbiological Labs' traditional manufacturing capabilities with its own AI and simulation technologies to enhance R&D and production efficiency, while expanding overseas sales networks using its board members' and its own network connections.

Through this, the company presented a goal of reaching 50 billion won in sales and a 10% operating margin within three years. The newly recruited board members—Dr.

Shin Jae-min, and professors Choi Yoon-jae and Kang Sang-ki—are expected to lead R&D upgrades in AI-based drug design, animal biotechnology and immunology, and culture and purification process optimization, respectively.

Insilico has continued to raise its stake to the high-30% range through open-market purchases since the acquisition, which can be interpreted as an effort to consolidate management stability.

However, results in the first and second quarters of 2026 showed declining revenue and widening operating losses, suggesting that achieving the stated targets will take time.

Product development aligned with disease trends, strengthened quality-control facilities (KVGMP), and an expanding export share are cited as pillars for earnings improvement, though these have not yet translated into the targeted results.