Chinese gene bank wants to do for biotech what Elon Musk did for space

Digitalisation of gene data is set to revolutionise the health industry. With the world’s largest DNA-sequencing capacity, the Chinese biotech group wants to lead the charge.

It all started with the rice.

In 2002 the paddy fields of China’s Yunnan province were the inspiration behind the cover of scientific journal Science as it published two draft sequences of the rice genome, thanks to breakthrough works by two different groups – one based in the US and one in China.

Fourteen years later the China National GeneBank (CNGB) officially opened in Shenzhen with a design (main picture) that, again, took inspiration from these rice paddies. The building marked a key step in the development of China’s bio-data, having opted against housing its samples in the three other DNA data centres that existed at the time in the US, Britain, and Japan.

Supporting the daily operation of the gene bank, now the world’s largest by storage capacity, is Shenzhen-based genomics giant BGI, which sequenced one of the two rice genomes back in 2002. Much of the CNGB database has been founded on BGI’s research.

The company, which started in 1999 in Beijing as a research institution, is today the biggest gene-sequencing group in the world with offices and facilities in seven countries. Its development over the years mirrors that of China’s genomics industry, whose projected compound annual growth rate is now among the fastest around the world at 37% through to 2021, according to China Investment Consulting Corp.

The share price of the group’s most commercially mature unit, BGI Genomics, skyrocketed close to twentyfold to Rmb262 ($41.36) four months after its Shenzhen stock exchange debut last July.

Although outwardly sceptical about the market hype, analysts have contributed to the surge by playing up the enormous potential of Chinese genomics, leaving investors plenty of room to exercise their imaginations.

As a “DNA superpower” – as Nature called it in 2010 – and with a successful initial public offering behind it, BGI has ample data and capital resources to put to work.

WHAT IS BGI?

To get a better grip of BGI’s work and its plans for future growth, FinanceAsia visited CNGB in Shenzhen’s Dapeng District, where its executives gathered in February for a three-day convention. In a rather apt piece of timing, just a few days a earlier, Elon Musk successfully sent his Falcon Heavy rocket skywards to illustrate the huge commercial possibilities awoken by the latest scientific advances.

Chen Yiqing

“Elon Musk’s rocket project demonstrated private sector’s value in venturing into sectors that conventionally needed massive government backing,” Chen Yiqing, chief financial officer of BGI Genomics, told FinanceAsia.

“If there is a company that can establish a paradigm in China to showcase private sector’s potential in public-sector businesses, it’s got to be BGI,” Chen said. Much like the aerospace sector, the research-centric life sciences industry depends heavily on government efforts to drive it forward.

BGI’s ties with the Chinese government are ambivalent.

The international Human Genome Project (HGP) – one of the greatest feats of scientific exploration in human history – kicked off in 1990. Nine years later at the HGP meeting in London, Yang Huanming, one of China’s leading genetics researchers, ran up to the stage and said China was willing to commit to 1% of the work. The action wasn’t authorised by Chinese authorities apparently, although in the end government gave it an okay and China became the only developing nation involved in the project.

It is then that the Beijing Genomics Institute, forerunner to BGI, was born under the aegis of the Chinese Academy of Sciences (CAS).

If it wasn’t for BGI’s advocacy, China may have missed out on the genomics frenzy of the 1990s.

BGI’s fast development ran against budgetary constraints after a few years since CAS institutes are subject to staff quota restrictions, among other things. So Yang and Wang Jian, another co-founder, decided to move BGI to Shenzhen – where “the mountains are high and the emperor is far away”.

Today BGI is a major powerhouse in research and development in a city long seen as southern China’s global factory but with growing aspirations to become its innovation hub, producing more than half of Shenzhen’s research papers published in Science and Nature each year.

For much of its history BGI has been a bit of a rebel; but it has also received help from Beijing and the wider state. The CNGB, for example, was state-funded; the Shenzhen government has also agreed to grant BGI Rmb5 million for every research paper it gets published in Nature or Science. “China can no longer rely on a demographic dividend for growth and [government officials] know it’s necessary to explore innovations,” Chen said. “BGI as a private organisation started from life science research and still focuses heavily on it today. If BGI could succeed, then maybe the same could be duplicated to other sectors that need massive government efforts.”

In 2010 BGI ordered 128 Hiseq 2000 sequencing systems used in the analysis of genetic variation and biological function from California-based Illumina, at the time representing the largest single order of next-generation sequencers, supported by a Rmb10 billion loan from the China Development Bank.

That helped BGI to sequence genomes at twice the speed and half the price of anyone else, and also provided an important cornerstone for the company to become a “gene tech complex” – as its own people call it.

BETTER, FASTER, CHEAPER

One application of BGI’s comprehensive sequencing and bioinformatics services is the NIFTY test (Non-Invasive Fetal TrisomY test), which was the first non-invasive prenatal testing solution to enter clinical trial in 2010 for detecting likely birth diseases such as Down Syndrome.

A NIFTY test cost around €600 ($734) in Europe and at least HK$3800 ($485) in Hong Kong. But BGI charges are as low as Rmb855 ($135).

The total number of pregnant women to have taken BGI’s NIFTY test exceeded 2.5 million last year – no one else in the world has been able to deliver such a result, according to Chen.

That illustrates the breakneck growth that the company is now enjoying thanks to China’s more favourable policy backdrop, given accumulated NIFTY tests done by BGI only exceeded one million for the first time in March 2016.

“With the introduction [of the] two-child policy in China many of the pregnant women-to-be [are] older than 35, which means a higher risk, for example, of the Down Syndrome,” Chen said, predicting even more red-hot growth for the company’s NIFTY testing services.

According to DPI Research, China’s market for non-invasive prenatal testing is likely to reach more than $1.7 Billion by 2024.

BGI is already able to collect gene data at a speed and cost that very few can compete with, but analysing the data is also key and in that respect the company has also positioned itself favourably. BGI acquired Silicon Valley-based sequencing company Complete Genomics in 2013. Based on CG’s technology, BGI launched its own high-throughput next-gen sequencers BGISEQ-500 and BGISEQ-50 in 2015 and 2016, respectively. They are potential game changers for BGI, which will no longer need to pay big money to buy sequencers from Illuminia, whose charges rise each year.

Its two new next-generation sequencers MGISEQ-2000 and MGISEQ-200, developed by subsidiary MGI Tech, launched in October and can complete one run with paired-end 100bp read length in less than 48 hours. That means consistent delivery of high-quality sequencing data that is both faster and cheaper.

This brings BGI to the cusp of developing precision healthcare and medication, which require massive data analysis using emerging technologies such as artificial intelligence.

INCLUSIVE PRECISION

By analysing a person’s genome data, the chances of getting a certain disease can be lowered with more suitable healthcare monitoring. The risks of wrongly diagnosed and treated are also reduced.

The targeted drug industry, a sub-sector of precision medicine, was worth around Rmb13 billion in 2017 and is expected to grow at more than 20% annually in the next five years, according to consultancy CEC Capital.

Lured by the vast economic potential, healthcare, technology, and insurance giants are racing to build the biggest databases and artificial intelligence-enabled care models, analysts at Sanford C. Bernstein said in a January report.

They added that China was moving at a faster pace than the rest of the world, presumably with BGI at the vanguard.

The first sequencing of a whole human genome in 2003 cost roughly $2.7 billion but now costs around $600-$700. BGI expects it to become $100 in a few years time, creating a cost base for the company to introduce affordable precision healthcare.

“We believe it should be inclusive,” Chen said.

To allow people to have a first-hand view and control of their genome data, BGI is developing and internally testing among its employees several digital platforms that track and illustrate visual presentations of key health parameters. These will go to the market soon, Chen said, without offering a specific timeline.

It is already offering over-the-counter tests to analyse a person’s blood type and genome, or check on the bacteria in the gut.

A set of diagnostic reagent for HPV (human papillomavirus) test can be purchased online from BGI. A user can access the testing result and analysis from a BGI app after mailing back his or her sample to its testing centre.

HPV is linked to cervical cancer, the second-largest killer of women and girls worldwide. In China a new patient is diagnosed every three minutes, a death occurs every six minutes, and 170,000 families will bear the consequences of having a relative diagnosed with cervical cancer, according to BGI. However, cervical cancer is among the very few cancers that can be prevented, making detection the key.

All of these efforts are consistent with what BGI loosely dubs “know your genes and call the shots when it comes to your health”.

All the tests undertaken, in turn, contribute to BGI’s massive database and collectively promise deeper insights, according to Chen. Sometime in 2018, BGI estimates that it will able to generate 100 petabytes (pb) of digital genome data. Using common 320 GB hard drives stacked on top of each other, 100 pb would be many times taller than the world’s largest buildings.  A sequence of ripple effects could affect the whole value chain of healthcare, including pharmaceuticals and medical equipment. If gene sequencing can be combined with CRISPR (a gene editing technology), personalised cancer vaccine or medicine can be developed.

“The next milestone for the genomics industry will be the usage of gene testing in cancer early detection. It may be the next [non-invasive prenatal testing breakthrough], or even bigger,” noted analysts at Bernstein.

BGI obviously has an eye on this. It raised around Rmb1.7 billion through an IPO in subsidiary BGI Genomics on the ChiNext board in Shenzhen in July. With this war chest, Chen said the company was now looking at making further acquisitions in the US and Israel, with a focus on innovative biopharmaceutical and medical equipment producers.

“The focus is on technology innovation and [intellectual property], so it may not be a company that’s already commercially successful,” Chen said, whilst declining to name names. As the flag carrier of Chinese biotech innovation, it seems that this BGI’s bank of genes will only grow bigger.

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