More than 90% of the world's gene sequencers are monopolized by Iumina. How can Chinese companies break through?
How important are sequencers to the genetic testing industry?
Just like chips in the communications industry, sequencers are essential equipment for genetic testing. After sample processing, raw data needs to be generated by a sequencer, and then biological information analysis can be performed to obtain sequencing results.
However, the domestic genetic testing market is basically monopolized by foreign companies. Lumina is an absolute oligopoly in the production of sequencers. More than 90% of the world's sequencing data is generated using umina instruments.
With the trade war between China and the United States becoming clear, many domestic genetic testing companies have expressed their concerns to reporters from the Huadou Times. Since the entire industry relies heavily on Sichuanumina's sequencers and supporting reagents, once affected by the trade war, its import prices will fluctuate, which will have a great impact on the company's revenue and even the future development of the industry.
Currently, the only domestic company capable of mass-producing clinical-grade sequencers is Shenzhen MGI Technology Co., Ltd. (hereinafter referred to as "MGI"). Will MGI become Huawei in the genetic field? Can it successfully seize the opportunity to seize market share and achieve a "breakout" in the oligopoly? In this regard, Jiang Hui, chief operating officer of MGI and vice president of the BGI Life Sciences Research Institute, told a reporter from the China Times that the key to achieving its own development is to continuously improve its product strength. MGI will continue to invest heavily in research and development, and do a good job in upgrading products and improving service quality in accordance with its existing plans class.
MGI may still have a long way to go before it can "break through".
The genetic testing industry is divided into upstream, middle and downstream. The upstream is mainly the production of testers and reagents and consumables; the midstream is the genetic testing service provider for end users, purchasing testers and supporting reagents and consumables produced by upstream companies to provide users with genetic testing services; the downstream is the users of genetic testing services, including hospitals, scientific research institutions, consumers and other groups.
There are three companies in the world that can produce clinical-grade sequencers and are in the upper reaches of the industry, namely !umina, Thermo Fisher and China's MGI. Among them, mumina is the absolute oligopoly in sequencer production. More than 90% of the world's sequencing data is generated using !umina instruments. Worldwide, umina's installed capacity reaches 11,000 units, with equipment prices ranging from US$50,000 to US$900,000.
Domestic genetic testing companies are mostly concentrated in the midstream, relying heavily on upstream testers and reagents and consumables, and have insufficient bargaining power. Leading companies such as Berry Genetics, Novogene, Annotherapy, WuXi AppTec, Burning Rock Medicine, and KingMed Testing are all important customers of Illumina.
Currently, there is widespread concern in the industry that once the Sino-US trade war affects the biological field, price fluctuations of lumina's sequencers and supporting reagents will have a greater impact on the entire domestic genetic testing industry.
A reporter from China Times contacted Lumina about this matter, and public relations personnel said that the company is currently unable to disclose the specific situation.
Previously, lumina reagents had experienced price increases. In 2012, Lumina raised the price of some reagents and issued a high-priced warranty contract to BGI, which greatly affected BGI's profits that year.
Due to the constraints of Illumina, BGI turned to deepen its own sequencing technology, and MGI Manufacturing was born.
In 2013, BGI acquired the American company Complete Genomics, obtained core patented technology, and then established its own sequencer R&D team in Shenzhen. This R&D team, which was a "confidential establishment" within BGI at the time, through the transformation of domestic technology, delivered the BGISEQ-500 high-throughput desktop gene sequencer with completely independent intellectual property rights in October 2015, and in April 2016, it was officially established as MGI.
According to Jiang Hui, five sequencers manufactured by MGI have achieved mass production, namely MGISEQT7, MGISEQ-2000, MGISEQ-200, BGISEQ-500, and BGISEQ-50. MGISEQ-T7 is a large-scale ultra-high-throughput sequencer with the highest daily production capacity in the world and the lowest unit sequencing cost; MGISEO-2000 is a medium-to-large sequencer that supports two types of chips at the same time and can be flexibly used in scientific research and clinical fields; MGISE0-200 is a miniaturized sequencer that supports a variety of read lengths and can flexibly meet the throughput and time requirements of different application scenarios. BGISE0-500 is a medium and large genome sequencer, and BGISE0-50 is a fast small gene sequencer focusing on medical testing applications such as fertility and pathogens. These five sequencers form a complete product layout for high, medium and low throughput.
The price of the sequencer manufactured by MGI is not much different from that of the same model from Llumina, but the cost of use will be lower than that of Llumina. Take the latest MGISEO-T7 as an example. The model with similar throughput between Ilumina and MGISEO-T7 is Novaeq-6000. Public reports show that NovaSeg6000 is priced at US$985,000 in the United States, and MGISEQ-T7 is priced slightly higher than competing products at US$1 million. However, during use, the reagent price of MGISEO-T7 is more than 50% lower than that of the other one.
As of now, the global installed capacity of these five sequencers is 1,100 units, which is one-tenth of Llumina's global installed capacity.