(1) The Ministry of Commerce announced that it would "prohibit Illumina from exporting genetic sequencers to China";

(2) Experts said that this matter will promote the development and accelerated penetration of China's sequencing product market, and popularize consumer-grade low-cost sequencing products.

Finance Associated Press, March 4 (Reporter Zheng Bingxun) Following the inclusion of Illumina in the list of unreliable entities on February 4, the Ministry of Commerce issued an announcement this afternoon to "prohibit the export of gene sequencers to China" against Illumina, Inc., a global leader in gene sequencing. The announcement also stated that "the unfinished matters shall be implemented in accordance with the provisions of the Unreliable Entity List." ”

According to the Regulations on the Unreliable Entity List issued by the Ministry of Commerce in 2020, foreign entities on the list may be subject to fines in proportion to the severity of the circumstances, in addition to being restricted or prohibited from engaging in China-related import and export activities.

After the above news came out, the stock prices of many domestic gene sequencing-related companies were "red". As of today's afternoon close, MGI (688114. SH) 20cm daily limit, closed at 97.27 yuan / share, Berry Gene (000710. SZ) rose 10.02%, while Dian Diagnostics (300244. SZ) and Daan Gene (002030.SZ) also rose 3.20% and 4.72% respectively.

A senior medical researcher told the Financial Associated Press reporter that "domestic leading companies such as MGI and Zhenmai Biotech will benefit from this." Guo Xinfeng, a senior pharmaceutical industry expert, also said, "For MGI, after the ban on the sale of imported high-end products from Illumina, it is easier for domestic equipment to open up the market, drive performance recovery, and at the same time buy time for the development of a new generation of high-throughput sequencing equipment." ”

In response to this matter, a reporter from the Financial Associated Press asked MGI about the impact, and the company personnel said "no response". The reporter asked Daan Gene and Berry Gene as an investor, and the former said, "I didn't pay attention to the relevant news, and I don't know the specific impact." The latter said, "Although Illumina is the company's supplier, we are not completely dependent on each other. ”

The above-mentioned medical researcher further revealed, "Illumina's sales in Greater China in 2024 will be 308 million US dollars, and the ratio of equipment and consumables will be 4:6. In this regard, Berry Gene Company personnel also revealed that the company has cooperated with Illumina in testing reagents, but now they only see the export ban on gene sequencers, and they have not learned about the prohibition of reagents.

According to Illumina's latest financial report, the company's total revenue for fiscal year 2024 was $4.372 billion, down 2.9% from $4.504 billion in fiscal year 2023. At the same time, Illumina's market share of China's gene sequencers and consumables market has decreased from 64.50% in 2021 to 54.2% in 2023 in terms of annual revenue.

Guo Xinfeng believes that the sanctions imposed on Illumina will accelerate the penetration of China's domestic sequencing products and increase the penetration rate of consumer-grade sequencing products. ”

For gene sequencing companies, Guo Xinfeng believes that "this will promote domestic gene sequencing companies to purchase domestic equipment and domestic compatible consumables, accelerate cost reduction and efficiency increase, and the gene sequencing industry may usher in a new round of rapid development."

It is worth noting that the reporter of the Financial Associated Press learned from enterprises and scientific research institutions that the localization process of the gene sequencing industry has been started before.

Hu Xiaoxiang, a professor at China Agricultural University, revealed that when she first carried out research on "low-depth resequencing technology", she used Illumina's platform, but since 2018, she has fully switched to MGI's platform, "The domestic platform is not only of good quality, but also has a lower cost than Illumina." ”

Hu Xiaoxiang said, "At present, we have promoted the technology to major pig and chicken breeding enterprises in China, and MGI has not only helped solve the problem of sequencing, but also made a closed-loop system of the whole industry chain with a series of automation equipment. ”

As a company focusing on transplant diagnosis and blood transfusion molecular diagnostics, Wang Hao, CEO of Jiangsu Weihe Biotechnology Co., Ltd., also revealed, "Starting from 2023, in the process of product transfer, we have made parallel comparisons with platforms including Illumina, and a large number of data shows that the domestic MGI platform can completely replace the Illumina platform at the technical level." ”

Jiang Hui, Chief Operating Officer of MGI, said that the solution provided by MGI is not only a replacement, but also a better end-to-end solution that can cover future scientific research and clinical research from beginning to end. She said, "The R&D cycle of instruments and equipment is very long, and MGI hopes to provide partners with more independent choices of technologies and platforms for scientific research institutions and medical institutions in terms of promoting localization." Collection

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