(1) The Ministry of Commerce officially announced that it would prohibit Illumina from exporting gene sequencers to China. However, the ban only covers equipment, and does not mention reagent consumables;

(2) According to the analysis, Illumina's domestic sales space is optimistic about the market share of domestic sequencers.

"Science and Technology Innovation Board Daily" on March 5 (Special Reporter Qiao Yilan) On March 4, MGI (688114. SH), Berry Gene (000710. SZ), Shengxiang Biology (688289. SH), BGI (300676. SZ) and other listed companies collectively rose sharply, due to an announcement by the Ministry of Commerce.

On the same day, the official website of the Ministry of Commerce issued an announcement on the unreliable entity list handling measures taken by the working mechanism of the Unreliable Entity List against Illumina of the United States. According to the announcement, it was decided to take measures against Illumina to "prohibit its export of gene sequencers to China".

Image source: official website of the Ministry of Commerce

Previously, on February 4, Illumina, a global gene sequencing giant, was included in the list of unreliable entities by the Ministry of Commerce of China for "violating the principles of normal market transactions, interrupting normal transactions with Chinese companies, taking discriminatory measures against Chinese companies, and seriously harming the legitimate rights and interests of Chinese companies".

There has been a flurry of speculation in the industry about what to do with Illumina. Generally speaking, foreign entities included in the Unreliable Entity List may be subject to one or more measures, such as restrictions on import and export activities, restrictions on investment in China, restrictions on entry of persons, work permits, or qualifications of stay or residence in China.

Now it appears that the response is to restrict import and export activities, that is, "ban Illumina's export of genetic sequencers to China", which has also become the final conclusion of this month-long turmoil.

Illumina's "exit" has brought development opportunities for domestic companies. Chen Zanquan, founder & CEO of Zaosi.com, told the "Science and Technology Innovation Board Daily" reporter that the ban has prompted domestic companies to accelerate technological breakthroughs, such as MGI has launched a sequencing solution suitable for multiple scenarios, and expanded the user base through a replacement preferential strategy.

In fact, as early as the date when Illumina was included in the list of unreliable entities by the Ministry of Commerce of China, a number of domestic companies such as Zhenmai Biologics, Sailu Medical, Geyinga, Yisu Microcontrol, and Sikun Biotech immediately released articles that could replace or replace Illumina.

In

its alternatives, Zhenmai writes that it has a "reversible end-terminated sequencing" sequencer product that covers a full range of application scenarios from small and medium-throughput to high-throughput and ultra-high-throughput, which can fully replace Illumina's MiSeq, NextSeq and NovaSeq series.

For example, the SURFSeq Q Series Ultra-High-throughput Sequencer is an alternative to Illumina's NovaSeq Series. The SURFSeq 5000 series is a replacement for Illumina's NextSeq1000/2000 series. The GenoLab M-Series mid-to-high-throughput sequencers are an alternative to Illumina's NextSeq 5 Series. The FASTASeq 300 series of low- and medium-throughput sequencers is an alternative to Illumina's MiSeq series.

"Illumina users can switch efficiently without having to change their existing processes, and the company is able to help users avoid the risk of impacting or disrupting existing businesses and workflows." Sail Medical said. On January 20, 2025, Salus Pro was successfully approved by the National Medical Products Administration (NMPA) for Class III medical device registration, and it is also the first gene sequencer based on reversible terminal termination sequencing method that has been approved for all application scenarios of clinical testing.

It is understood that MGI has launched a replacement solution for the full-throughput sequencing platform for Illumina's existing users. Starting from February 8, MGI will provide discounts for suitable equipment or reagents according to the user's replacement model and boot frequency, as well as free trial and demo experience.

In addition, companies such as Gene Inga and Yisu Microcontrol have also successively released replacement plans for Illumina's equipment or reagents.

However, the Ministry of Commerce's ban is clearly aimed at the export of gene sequencers, and does not mention reagent consumables.

"After the purchase of [sequencer] equipment, supporting reagents and consumables need to be used, and if reagent consumables are also limited, not only the incremental market, but also Illumina's domestic stock market may also shift to domestic production." Previously, some analysts told the reporter of the "Science and Technology Innovation Board Daily".

In this regard, Chen Zanquan believes that in view of the relatively large number of installed stock of Illumina in China, the absence of reagent consumables in the ban also leaves a buffer period for all parties. In addition, it also gives domestic reagent consumables companies a certain buffer period, so as to step up the adaptation of more models of reagent consumables.

Huafu Pharmaceutical commented that Illumina is optimistic about filling the market share of domestic sequencers in the domestic sales space, and in addition to MGI, it can pay attention to potential sequencer incremental contribution companies. Collection

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