The opening soared 22%, how will the first stock of domestic gene sequencer reconstruct the gene market?

On September 9, after some waiting, BGI Intelligent Manufacturing, a leading domestic gene sequencer company, officially landed on the Shanghai Stock Exchange Science and Technology Innovation Board, priced at 87.

Founded in 2016, BGI Intelligent Manufacturing was originally spun off from BGI Gene, a master-level enterprise in the field of domestic gene sequencing, based on the core technology of gene sequencing introduced in the early stage, focusing on the research and development, production and sales of instruments and equipment, reagent consumables and other related products in the field of life science and biotechnology, and is one

Containing the golden spoon born, anchoring the jewel field in the crown of gene technology, BGI Intelligent Manufacturing has been a star project in the primary market since its inception, which is favored by capital, IDG Capital, CITIC Securities, Jinshi Investment, Songhe Capital, CPE, Huaxing New Economy Fund, Guofang Capital, Huatai Zijin, Titanium Capital, Shanghai Sailing, Cornerstone Capital, Shanghai Dingfeng, Guotai Junan Venture Capital, Guangfa Xinde, Orient Securities Capital and other well-known investment institutions along the

But in fact, for investment institutions, it is not easy

The project leader of IDG Capital told Arterial Network that in 2019, Wang Jian, the founder of BGI Gene, led a team to visit, and he was impressed by

Subsequently, the IDG team began to systematically study the feasibility

Since its inception, BGI Intelligent Manufacturing has quickly launched a series of independent research and development gene sequencers, under the intellectual property barriers built by the giants, gradually breaking the long-term monopoly of imported brands in the upstream of the gene technology industry chain, and is also regarded as the light of domestic goods in the top technology field of life science tools, and iteratively exports the laboratory automation business sector, bringing stable revenue growth

After the listing, BGI Intelligent Manufacturing will undoubtedly have stronger capital strength and greater brand influence, and how it will stir up the global genetic market pattern is obviously more worth looking forward to

Downstream applications of gene sequencing,

It is a vast blue ocean

Gene sequencing is one of the most high-profile innovations in cutting-edge science and clinical applications, and it is also a technology

Specifically, gene sequencing refers to the process

On top of the human genetic sequence, it contains a large amount of key information

Because of this, gene sequencing technology has been rapidly promoted and iterated, forming a huge industrial chain

At this stage, the most important downstream application scenarios of gene sequencing are clinical testing and scientific research services

Let's start with fertility

The second is its application in tumors

Among them, concomitant diagnosis is an important product
after tumor treatment has entered the precision stage of targeting and immunity.
For example, tumor immunotherapy represented by PD-1/PD-L1 drugs has achieved more excellent clinical results than traditional therapies, but only about 20% to 40% of patients have responded to immunotherapy, which requires concomitant diagnosis
.
In this process, tumor companion diagnosis based on second-generation sequencing can detect specific regions of the genome at one time, find complex variants faster, and provide more accurate solutions for clinical diagnosis
and treatment.

Early diagnosis and early screening and recurrence monitoring are the new application areas of second-generation sequencing technology in tumor diagnosis and treatment scenarios, and the commercialization and productization exploration of each family are in the ascendant
.
For patients with early or potential tumors, by measuring biomarkers represented by ctDNA methylation, lesions can be detected early and noninvasively and follow-up and intervention
initiated.
Long-term effective monitoring of disease progression is particularly critical for postoperative neoplastic patients, while the sensitivity and specificity of existing modalities are weak, and the effect of prospective early warning is poor
.
In contrast, biomarkers such as ctDNA have a short half-life, strong sensitivity, and can reflect tumor dynamic changes in real time, and are increasingly being applied to clinical practice
.

According to Frost & Sullivan's analysis, the domestic tumor second-generation sequencing application market size has increased from 700 million yuan in 2016 to 4.
1 billion yuan in 2021, with a compound annual growth rate of 41.
1%.

It is expected that by 2025 and 2030, the size of this market will reach 14.
9 billion yuan and 49.
1 billion yuan respectively, continuing to show rapid growth
.

In addition, in the entire application market of gene sequencing technology, scientific research services serving users such as scientific research institutions, pharmaceutical companies, CRO companies, and third-party laboratories occupy about 30% of the market
.
The market competition is extremely fierce, but as a rigid demand for life science research, the national level has also increased investment, and the entire service market has maintained steady growth
.
At the same time, gene sequencing technology is also being applied to forensic identification, environmental pollution control, biodiversity conservation, agriculture and animal husbandry breeding and other fields
.

Cost is still a constraint for gene sequencing applications

Over the past few years, demand in the middle and downstream of the gene sequencing industry chain has continued to surge, making gene sequencers the hottest tool in the life sciences
field.
At the same time, this complex and high-end device is also becoming more and more prominent in people's efforts to reduce the cost of gene sequencing technology
applications.

Gene sequencing is expensive, both for scientists, clinicians, and patients
.
Among them, there are both objective and subjective reasons
.

Objectively, genetic sequencing is inherently expensive
.
On the one hand, human genome data is huge and complex, and it is extremely difficult to sequence and analyze them completely
.
This data system contains genetic maps, sequence maps, and transcription maps, corresponding to more than 6,000 genetic gene regions and more than 52,000 DNA fragments
.
It was not until 2003 that the mapping of the human genome was completed, which took 13 years and cost more than 3 billion yuan, and was completed
by scientists in 6 countries.

On the other hand, the technology of gene sequencing has not been widely used for a long time, and the gene sequencer itself is still in the process of
transitioning from elite equipment to mass equipment.
So far, according to the principle, the mainstream sequencing technology has been derived into 4 categories, namely the well-known first-generation sequencing (Sanger method), the second-generation sequencing (NGS), the third-generation sequencing (SMRT single-molecule real-time sequencing), and the fourth-generation sequencing (nanoporous technology).

Although they are intergenerational in the use of names, there is no complete replacement between these gene sequencing technologies, and the four generations of gene sequencing technologies have their own advantages and disadvantages
.
For example, the accuracy of Sanger method sequencing is very high, but the throughput is very small, so it takes a long time, the second-generation sequencing technology flux is very high, but the reading length is very short, some complex variations may be ignored, and the reading length of the third and fourth generation sequencing is very long, which expands the application boundaries of gene sequencing technology, but the accuracy still needs to be improved
.
Overall, each generation of gene sequencing technology is still in its own optimization iteration, and it also puts forward high requirements for the professionalism of operators
.
Of course, second-generation sequencing technology is currently the most widely used
.

The subjective reason why gene sequencing is expensive is mainly due to its highly monopolized market pattern
by giants.
For a long time, the global gene sequencer market was monopolized by Illumina, Life Technologies (acquired by Thermo Fisher in 2012) and Roche, with Illumina having the largest
market share.
The data shows that with the continuous upgrading and promotion of the HiSeq series gene sequencer, Illumina continues to encroach on the remaining market share, gradually forming a dominant situation
.
Since 2016, Illumina has provided gene sequencers and supporting reagents that account for more than 80% of the global gene sequencing market
.

Therefore, in the procurement of the gene sequencer itself, it is difficult for midstream and downstream manufacturers to have premium space
.
What is more fatal is that the monopoly of the imported brand of the gene sequencer market, for the supporting reagents that will be used every time the boot is started, the monopoly gene sequencer manufacturers tend to continuously raise the price of supporting reagents to maximize
revenue.
The original BGI gene, also deeply familiar with the pain, came up with the idea of independently developing gene sequencer, so that BGI intelligent manufacturing
.

But breaking monopolies is not easy
.
According to IDG Capital, an early investment institution of BGI Intelligent Manufacturing, in addition to the patents of chips, reagents and related sequencing methods, gene sequencers really land, but also need the cross-border integration of multiple technologies such as chemistry, opto-electromechanical and electrical, etc.
It is a scientific instrument with a relatively high degree of complexity and collection, and the comprehensive technical capabilities of enterprises are extremely high, which is also the reason why
there are only a few gene sequencer mass production manufacturers in the world.

In fact, Wang Jian was well aware of the difficulty
of localization of gene sequencers from the very beginning.
He once told IDG Capital that he hopes that an institution can take a longer-term view and do this with BGI
.
"Because the independent research and development of life science tools is bound to be difficult, it requires long-term patient investment and firm support from investment institutions, but once it is done, it will have a great impact on the entire Chinese biotechnology industry and even the development of life sciences in the world, which can create huge social value
.
"

Nowadays, with the landing of BGI Intelligent Manufacturing in the capital market, more and more gene sequencers that adapt to different application scenarios have been listed, or will change this cost constraint caused by a single supply, and the market pattern in the middle and lower reaches of gene sequencing will also change
.
Arterial Network previously learned that in China, more and more gene sequencing service providers have begun to use imported and domestic dual platforms to improve efficiency, and in the process of localization and hospitalization of gene sequencing services, the choice of supporting sequencers has profoundly affected the future direction
from the beginning.

How big is the winning side of BGI Intelligent Manufacturing?

There is a fact that BGI's market share in the global gene sequencer market is not high
.

According to the data, the upstream market size of the global sequencing industry in 2019 was about 4.
138 billion US dollars, illumina's market share was about 74.
1%, the related business revenue was 3.
068 billion US dollars, Thermo Fisher's market share was about 13.
6%, the related business revenue was 563 million US dollars, and BGI's related revenue was about 145 million US dollars, accounting for only 3.
5%
of the upstream market share of the global sequencing industry 。 According to the prospectus, in 2021, the revenue of BGI's gene sequencer business segment is only slightly higher than that of 2019, and it can be inferred that its market position has not changed fundamentally
.

However, we still look forward to BGI's future potential energy
.

First of all, BGI has mastered the key technology
of gene sequencer research and development and production.
As can be seen from the analysis in the previous section, this is very valuable
.
Specifically, BGI Intelligent Manufacturing's representative core technology packages in the field of sequencing are "DNBSEQ Sequencing Technology", "Regular Array Chip Technology", "Sequencer Opto-Electromechanical System Technology", etc.
, which have significant advantages
in improving the quality of sequencing and reducing the cost of sequencing.

Secondly, the market space of global market sequencers is large enough and the growth rate is very fast, which leaves an opportunity for the new market demand for BGI intelligent card slots
.
According to the prospectus, the global gene sequencer and consumables market has maintained double-digit growth
over the past few years.
It is estimated that by 2030, the global gene sequencer and consumables market size will reach 24.
58 billion US dollars, and the domestic gene sequencer and consumables market size will also reach 30.
39 billion yuan
.
In addition, from the analysis at the beginning of this article, it can be seen that the application scenarios of gene sequencing are still expanding, which will continue to stimulate the demand for
gene sequencers.

It is worth noting that in May 2022, BGI Intelligent Manufacturing and Illumina won a comprehensive reversal of victory in a lawsuit on the patented technology of microfluidic sensors, and won a loss of 2.
2 billion yuan
.
Two months later, the parties reached a settlement in which Illumina will pay this compensation to BGI's subsidiary CG, and for the next three years, they will not sue each other and their customers for patent infringement, violations of U.
S.
antitrust laws or unfair competition, nor will they claim for
possible damages caused by the existing sequencing platform.
Since then, BGI Intelligent Manufacturing has made great strides towards mainstream overseas markets such as Europe and the United States
.

Third, for the new market demand, BGI intelligent manufacturing has the ability to
respond quickly.
Between 2019 and 2021, BGI's laboratory automation business segment grew rapidly
in revenue.
The reason behind this is that in response to the new crown virus epidemic, BGI Intelligent Manufacturing quickly integrated technical resources to form a complete solution, quickly developed a series of new products such as the automated cupping system MGISTP-7000 and the automated sample processing system MGISP-960, and continuously improved the automated detection capabilities of the equipment, helping the prevention and control of the epidemic while also bringing performance growth
.

For BGI, the listing is a milestone and a new starting point, and the same is true for the domestic gene sequencing industry at this moment
.
We expect that genetic technology can provide more and better solutions
for human health.