SINGAPORE--China sequencing giant BGI has had studies published recently having to do with things as deep as detecting novo mutations responsible for most genetic diseases to something as ordinary, yet important, as a prenatal genetic test it calls NIFTY that is nearly 100% accurate. The work has drawn attention, with the company being identified as one of several firms with strong mainland ties that could attract investment money through several routes, including an initial public offering.
The company with headquarters on the mainland was turned to with requests to help deal with a couple of major outbreaks in recent years, such as the SARS scare. Later E. coli spread and its expertise was tapped. In both, it quickly sequenced the virus involved, enabling treatments to be developed.
BGI began in 1999 as Beijing Genomics Institute with the help of government institutions. It has moved far away to Shenzhen to take advantage of a state grant for startups. It dropped the government-like name in 2007 but kept its acronym and has operated largely outside the norm proscribed by the national government and expected of its businesses.
BGI, although it spent time developing NIFTY, actually is the world leader in sequencing genomes with operational centers in four other China cities, one in the United States and one in Denmark and smaller operations in Japan, Singapore and even Laos, choosing to remain concentrated in the Asia-Pacific region.
Just a few days before that NIFTY study was reported, another BGI study was released, about sequencing biopsied embryos during in vitro fertilization to detect mutations behind most genetic conditions.
The company is one of several in focus for investors in the bio space in China. Mainland firm 3SBio, which delisted from the NASDAQ last year, is said to be mulling a listing in Hong Kong. BeiGene is also rumored to be considering an IPO on the NASDAQ to fund its clinical work in cancer candidates it has developed with Merck Serono, and $100 million of venture capital has flown into China biotech Innovent. BGI abandoned plans for an IPO in Hong Kong last year that would have raised $400 million.
But BGI is of particular interest for investors because of the depth of nerds, its techies, who work casually dressed much as other high-tech companies. But unlike the others, its centers boast floors of banks of computers wall to wall, looking like giant versions of the computer operations of the past mid-century that delivered data on punch cards.
Operating with capabilities unimaginable then, BGI's massive computer setups today are sequencing thousands of genomes a day, ranging from tiny microbes to one huge and continuing project to sequence the genome of humans and build a database of millions of people.
The computers and hundreds of genome-sequencing machines with the latest technology are kept busy with the mapping, eventually building a library of the genes of those millions of people, designed to serve as the basis for more-advanced genetic research, but also for use in discovering new drugs. With those capabilities, BGI has attracted funding from dozens of foundations.
BGI's business model also is somewhat upside down, and not just in China. It openly shares all that data with other researchers. The employee-owned non-profit company has grown so big, there is some worry China's government may feel a need to bring it back into the Chinese way of conducting business.
|BGI CEO Wang Jun|
CEO Wang Jun told the Financial Times in a recent interview, "We represent a new model of an international Chinese organization. China has a legitimate shot to be a lead player on the international stage. Our technology can change the world."
Although BGI does not fit the Chinese model of how its form of limited capitalism ought to work, it may have become too large, too influential, too well-known, even too appreciated. Perhaps it has become too big to veil.
Some of its backers and users see BGI as a company that could be transforming the world view of China as a nation of businesses that copy others, even stealing their intellectual property, into one recognized a high-technology leader based on BGI's work as what the Financial Times called "the technology incubator for China."
Its work primarily is in agriculture and health, allowing BGI to boast as "the first citizen-managed, non-profit research institution in China," one with a mission to ensure "that genomics science and technology can be made to work for the benefit of everyone."
With those altruistic goals, at least words, the company's latest publicly reported annual revenues grew to $250 million in 2011, likely far higher than that today as acquisitions added new capabilities. Its work also has advanced in the ensuing four years, allowing one of its lead researchers to forecast for the Sydney Morning Herald recently that within another three years, the procedure for treating cancer patients and those with similar diseases "will be totally changed."
Zhang Gengyun, who made that forecast, is a BGI vice president who said capabilities already are to the point that a patient could have samples sequenced monthly to see what has changed and what is happening to the disease that recently, and determine if the drug or other treatment is doing the job.
"We can tell pretty clearly. I think that will be very good news for those patients," he said in the Herald interview.