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reporter of china business network: jin zhe editor of china business network: chen junjie

on september 9, bgi group released its latest nanopore sequencer to the world at its headquarters in shenzhen. one day later, news came from across the ocean that the u.s. house of representatives passed a bill numbered hr8333 and named "biosecure act", and five chinese companies, including bgi group and mgi intelligence, were designated as "biotechnology companies of concern."

regarding the passage of the above-mentioned bill, bgi group mentioned in a statement that the essence of the bill is to use the name of us national security to attempt to use legislative means to interfere with normal market order and hinder fair competition, thereby achieving the purpose of striking at chinese biological companies such as bgi and strengthening the monopoly position of a certain us company in the us gene sequencing market.

an anonymous gene sequencing industry insider told the reporter of the daily economic news that the domestic gene sequencer industry has been actively advancing and striving to develop to a higher level. gene sequencing is directly related to the bio-information security of the country and the nation, so just like the semiconductor industry, it will definitely be paid attention to and suppressed by the united states.

bgi group and mgi openly fight back

on september 10, bgi group and bgi intelligence issued statements to fight back. bgi group said, "we are disappointed with the result of this vote. we reiterate that bgi strictly abides by us laws and market rules, does not access personal data in the united states, and does not pose any threat to us national security. therefore, the bill's restrictions on bgi in the us market will not benefit us national security, but will actually intensify and expand the monopoly of us domestic companies in the field of gene sequencing."

according to cankao xiaoxi, chinese foreign ministry spokesman mao ning emphasized at a regular press conference that china firmly opposes the u.s. house of representatives' review and passage of relevant bills and discriminatory measures against chinese companies. the u.s. should abandon its ideological prejudice, truly respect market principles and economic and trade rules, stop advancing relevant bills, stop abusing various excuses to unreasonably suppress chinese companies, and provide a fair, just and non-discriminatory business environment for companies from all countries.

mao ning also said that china will continue to firmly safeguard the legitimate rights and interests of its domestic enterprises and support chinese companies in safeguarding their own rights and interests in accordance with the law.

it is worth mentioning that at the launch of the nanopore sequencer cyclone on september 9, xu xun, dean of the bgi life sciences institute and executive director of bgi group, shared an experience that made everyone think deeply - in 2007, bgi settled in yantian, shenzhen. at that time, sequencing technology was changing rapidly. bgi spent hundreds of millions of dollars to buy 128 sequencers in one go, signed strategic agreements with eight of the top ten pharmaceutical companies in the world, and became the world's largest sequencing center. just when they thought that bgi could expand its scale by constantly buying new equipment, they were hit hard.

talking about his experiences at that time, xu xun listed them one by one. starting from 2011, the reagent discounts that were originally promised were cancelled, and the reagent prices increased by 40%. what was even more frightening was that bgi could not get the discounts that everyone else could get. in addition, when some laboratory machines had problems, the other party could not provide maintenance services on the grounds of a parts embargo. later, what was even more exaggerated was that they were prohibited from moving equipment in the same building and conducting clinical applications.

"we spent hundreds of millions of dollars to learn a profound lesson: technology cannot be bought. bgi says that genetic technology will benefit mankind, but if we don't start from the source of genetic technology, bgi will never be able to truly benefit mankind." in 2012, xu xun was ordered to develop bgi's own equipment. at that time, they went to various places to seek support. at one of the meetings, an expert said that bgi only knew how to provide services, so how could it possibly build such a complex equipment.

in order to build the first prototype, they bought some parts from huaqiangbei and taobao, such as a white refrigerator bought from taobao for 120 yuan. in 2015, from the earliest prototype to the first officially launched commercial machine, bgi finally took the first step. although this machine may have problems of one kind or another, bgi has been constantly innovating and iterating for higher precision, higher throughput and lower cost.

according to information, the first ngs sequencer approved by the national medical products administration in 2014 for the detection of fetal chromosomal aneuploidy came from bgi group. after several years of hard work, bgi has successively launched several new ngs instruments and supporting equipment.

the reporter also noticed that at the press conference that day, bgi group released cycloneseq-wt02, a medium-throughput nanopore gene sequencer that can accurately capture subtle information in complex samples. the high-throughput nanopore sequencer cycloneseq-wy01 not only has ultra-long read length and long-lasting continuous testing, but can also fully cover complex genome sequences, filling the gap in high-throughput chips in the domestic nanopore sequencing field.

domestic sequencers enter explosive growth period

the sequencer is the core of the gene sequencing industry chain and a high-barrier industry. it provides data support for disease diagnosis, drug development, gene editing, etc. by reading dna and is an important tool in the field of biotechnology.

at present, the technical development of sequencers has gone through three generations, namely the first generation based on chemical synthesis (sanger method), the second generation based on fluorescent signals (high-throughput sequencing), and the third generation based on electrical signals (single-molecule sequencing). with the increase in sequencing demand and the reduction in costs, the fourth generation sequencing technology - nanopore sequencing is emerging, which can achieve fast, cheap, accurate and long-read sequencing.

the company mentioned in bgi group’s statement is most likely illumina, a global leader in gene sequencing and chip technology headquartered in the united states.

previously, illumina was a roadblock for mgi to enter the u.s. market. since 2019, illumina and its subsidiaries have initiated a series of patent,trademark infringementlitigation cases.

in july 2022, mgi and its affiliates announced that they had reached a settlement with illumina on all pending litigation in the united states. under the terms of the agreement, both parties will no longer object to the judgments of the northern district court of california and the district court of delaware. illumina also paid a net compensation of us$325 million to cg, a subsidiary of mgi.

this is the explosive growth period of domestic sequencers. according to statistics from the eggshell research institute, 8 domestic sequencers will be commercialized in 2022 and 7 in 2023. it was also in 2022 that mgi's share of the local market exceeded that of illumina.

eggshell research institute has compiled statistics on the public bidding data for sequencers from january 1, 2023 to december 31, 2023. from the perspective of brands, domestic brands are already in a relatively advantageous position. in the 2023 bidding data, 60.4% are domestic brands and 25.4% are imported brands.

according to the 2024 interim financial report, illumina's revenue in the first half of the year fell 3.31% year-on-year to $2.188 billion, but its cumulative net loss in the first six months of this year was as high as $2.114 billion, an increase of 815% year-on-year. after the interim report was disclosed, illumina also lowered its full-year performance target, and it is expected that the year-on-year decline in revenue in the instrument and equipment segment is likely to exceed 30%.

the aforementioned industry insider said that the domestic gene sequencer industry has been actively advancing, and the new product actions of mgi also show that everyone is optimistic about the prospects of nanopore sequencing technology and is committed to providing users with more cost-effective sequencer products. in the next 3 to 5 years, nanopore sequencing and second-generation sequencing will still complement each other's advantages and compete in a differentiated manner. in the more distant future, nanopore sequencing will occupy a larger market share. as for whether chinese companies can take the lead in this field, the person said, "it is possible, but it still requires a lot of effort and patience."

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