BEIJING -- Chinese gene sequencing technology developer MGI Tech has closed a $1 billion series B round backed by IDG Capital and Citic Private Equity Funds Management, a record amount for China's genomics industry, as the company chases its goals of unlocking the doors to a crucial sector and helping to combat the spread of the coronavirus.
Spun off from genomics services provider BGI Group in 2016, MGI Tech develops gene sequencing systems and other products for use in the life sciences and health care sectors. The company develops, manufactures and sells an array of products, including DNA sequencers as well as sequencing reagents, materials and biochemical reaction systems. It offers digitization equipment and solutions to clients in the medical, agriculture and health care industries.
BGI Tech has elbowed its way into the upstream segment of the gene analysis market in China by leveraging its core technology to crack the dominance of foreign powerhouses and raised over $200 million in series A funding.
China's DNA sequencer market has long been dominated by foreign players. The situation has hurt the price competitiveness of Chinese companies offering genetic analysis services in the rapidly changing and fiercely competitive market for DNA sequencing.
When the prices of DNA sequencers and sequencing reagents rise, Chinese providers have no choice but to raise the prices of their services.
MGI Tech has reduced its dependence on foreign technology and become the world's third largest manufacturer of DNA sequencing systems for clinical applications by using only Chinese technologies.
"Our operations have been seriously restrained because we have been fighting with foreign companies by using foreign-made weapons," said Wang Jian, co-founder and chairman of BGI Group. "But now we can fight with our own weapons, DNA sequencers we have developed on our own. This has given us complete leadership in terms of tools used in the business."
The market for systems that determine the DNA blueprints of people is difficult to break into. This is because developing and manufacturing such systems requires a sophisticated combination of expertise and technologies in such research areas as biochemistry, optics, hydrodynamics, mechanical engineering and software algorithms. A lack of any one of these elements precludes high-quality gene sequencing.
Since acquiring Complete Genomics, a DNA sequencing company in Silicon Valley, in 2013, MGI Tech has improved the U.S. company's large DNA sequencers mainly used for research to develop smaller, lighter systems to meet clinical needs.
Through this process, MGI Tech has developed core parts of DNA sequencers on its own. The company has secured technological leadership in the market by releasing new models every year. It offers a wide range of sequencers of various grades.
MGI Tech's growth and evolution has been driven by a powerful research and development team. Its R&D staff makes up over 40% of the company's 1,000-strong workforce.
Over the years, the company has spent more than 5 billion yuan ($707 million) on R&D, filed north of 740 patent applications and produced over 36 petabytes of gene sequencing data.
MGI Tech's rapid growth in recent years has coincided with the vigorous expansion of the global genetic testing market. The company operates in 39 countries and areas and has more than 530 corporate clients around the world.
MGI Tech's goal is to build a full-fledged domestic ecosystem in the genetic analysis industry. As more companies develop and operate platforms based on Chinese-made DNA sequencers, an entire chain will form, leading to the creation of an open industry ecosystem, the company says.
MGI says it will remain committed to building a DNA sequencing ecosystem to lower costs and offer better access to sequencing technology.
MGI Tech's equipment has been used for the rapid detection of the COVID-19 virus. The company has been playing an important role in the battle against the pandemic since February.
Scientists at an emergency COVID-19 detection lab in Wuhan that was built in cooperation with other institutions has succeeded in significantly reducing the time required for RNA testing for the virus, contributing to the Chinese government's efforts to bring the outbreak under control.
After the virus was contained in China, the company started providing its equipment, experience and engineers to other countries to help them deal with their outbreaks.
MGI Tech offers three key technologies to help fight the new coronavirus.
One is the company's High-throughput Automated Sample Preparation Systems, which offer much greater capacity to detect the virus's RNA.
MGI Tech's MGISP-960 and MGISP-100 automated viral RNA extraction and sample preparation systems installed at the Wuhan lab can carry out more than 20,000 tests per day.
Theoretically, the lab is now capable of handling over 100,000 daily samples.
Secondly, MGI Tech's DNA sequencers help researchers decode and study the virus, accelerating efforts to develop COVID-19 vaccines and treatments.
Thirdly, the MGIUS-R3, a robotic ultrasound diagnostic system, helps prevent infections between doctors and patients by enabling remote diagnosis. Since February, multiple medical institutions have adopted the system. And the China National Medical Product Administration recently authorized MGIUS-R3 sales in China.
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