Ameing for Asia

China Fast Becoming Top Player in Booming Asia Genomics Market

By Ames Gross
June 22, 2018


• Categories: Ameing for Asia, Business Analysis, Market Access

With government support, Chinese companies are investing billions of dollars into genetics research and funding promising new companies at home and abroad. Other Asian economic powerhouses are following suit, although on a significantly smaller scale than China. As cascading advances in genomics unlock the keys to how the human organism interacts with its environment, the Asian tigers want to get into this game, too.

China’s Genomics Boom
In China, demand for genetic sequencing is booming, fueled by the country’s growing middle class, aging population, and expanding healthcare system. The size of the genetic testing market in China grew by a multiple of five to a market share of $922 billion between 2012 and 2016, according to data released by Chinese genetics giant BGI. With more than 329 million people older than 65 projected in China by 2050, the personalization of healthcare using genetics—known as precision medicine—is attractive. It could hold the key to understanding, and maybe even curing, a host of diseases.

All of the above factors has led to aggressive competition to launch genomics research institutes and companies that can monetize a new universe of projected medical advances. The Chinese government calls genomics a key strategic field in its 14th Five-Year Plan (2016–2020) for the country’s economic and social development. In 2016, the Chinese Academy of Sciences launched what it calls the Precision Medicine Initiative—a 14-year, $9.2 billion project to sequence more than 100 million human genomes by 2030. Last December, China’s Ministry of Science and Technology joined in with a human genome research project to document the genetic makeup of 100,000 people. Using the genetic data of nine different minority groups, researchers hope to decode hereditary information within genes.

Chinese Genomics Companies Leap Forward

The business of genomics in China has grown from a single company in 1999 to more than 15 companies today. Among them, the biggest players are BGI, Annoroad and WuXi NextCODE.

The first company, Shenzhen-based BGI, was founded in 1999 when a pair of Chinese researchers persuaded the leaders of the Human Genome Project, then in full swing, to let them handle 1% of the work, making China the only developing nation to play a major role in the massive research endeavor. Not long after, it astonished the world by first publishing the complete genetic sequence of the rice plant, and then decoding the DNA of the giant panda.

Since then, BGI has made aggressive moves to expand. Several years ago, it invested heavily in a genomics-based test that screens maternal blood to determine whether a fetus has chromosomal abnormalities. According to BGI, more than 1 million units of the testing kits, named NIFTY (Non-Invasive Fetal TrisomY test), were sold in 2016. That was the same year China moved from a one-child policy to a two-child policy, increasing demand. Now BGI controls nearly half the prenatal screening market in China, far ahead of its closest competitor. Last July, BGI Genomics, a division of the company, carried out a $86.85 billion initial public offering on the Shenzhen Stock Exchange’s ChiNext board. In one month, its value soared eightfold.

In Beijing, genomics firm Annoroad has also become a major market player. In 2015, the company paired with California firm Illumina to offer next generation sequencing technology for the reproductive health market in China. Last November, Annoroad raised nearly $105 million in new funding.

Shanghai-based WuXi NextCODE, another company offering genomics-based tests, is also growing fast. It changed its name in 2015, when it acquired NextCODE, an Icelandic genomics company. It now has offices in Shanghai, Iceland and the United States.

Singapore, Japan Get in on the Act

While China leads the way by far, other Asian nations are part of the genomics ferment, too. Leading companies in Japan, Singapore, Hong Kong and India have made major new investments in genomics-driven health screening services over the last two years, and their governments are looking to establish genomic research institutes.

Last year, Japan’s Softbank led a $360 million investment in California-based Guardant Health, which is developing cancer diagnoses based on blood samples. Singapore’s Temasek, a government-owned investment firm, also invested in the Guardant deal. In Hong Kong, genomics company Prenetics is targeting the East and Southeast Asian markets. Another genomics company, Xcode, is based in India.

What’s Next?

As genomics takes firm hold in Asia, regulators will need to establish standards on the use of genetic data and how it is owned and shared. And China will need to grapple with and overcome concerns from the United States and elsewhere that the genetic data it is so quickly acquiring could be weaponized. But all indications are that Asian firms, Chinese firms in particular, have doubled down on the double helix. What is driving the surge is not national security, but what might be called health security—the growing desire among Asian consumers to know as much as they can about what makes up their bodies.