Mega Genomics Files for Hong Kong IPO as China's Largest Consumer-Grade Genetic Testing and Cancer Screening Platform

Amid persistently high incidence and mortality rates of diseases, particularly cancer, growing health management awareness, and a significant rise in residents’ consumption capacity, consumer-grade genetic testing and cancer screening are widely recognized as two promising emerging sectors.

Among these, consumer-grade genetic testing, as an important means of health management, has demonstrated significant potential. The conversion rate for consumer-grade genetic testing in China is continuously rising. In 2020, the cumulative number of consumers of consumer-grade genetic testing services in China reached 12.1 million. From 2016 to 2020, the number of Chinese consumers undergoing genetic testing grew at a compound annual growth rate (CAGR) of 69.4%, and is projected to exceed 167.2 million by 2030.

Cancer screening, as a technology capable of altering life trajectories, also boasts substantial market potential. According to the latest 2020 global cancer burden data released by the International Agency for Research on Cancer (IARC) of the World Health Organization, China recorded 3 million cancer-related deaths, accounting for 30% of the global total. In 2020, the screening market potential for the five most prevalent cancers in China—gastric cancer, colorectal cancer, lung cancer, breast cancer, and liver cancer—was approximately RMB 201.5 billion.

Positioning in the consumer-grade genetic testing and cancer screening sectors has become an inevitable trend in the genetic testing industry. Meiyin Genetics is one of the few companies in China that has demonstrated outstanding performance in both consumer-grade genetic testing and cancer screening.

In the consumer-grade genetic testing industry, Meiyin Gene isThe largest consumer-grade genetic testing platform in China and one of the top three globally, it is also the only consumer-grade genetic testing company in China that has maintained continuous profitability.

Data shows that as of June 30, 2021, Because of Health Science and Technology (Beijing) Co., Ltd. had cumulatively conducted over 10 million genetic tests, with a testing volume of 2.7 million in 2020, accounting for 65.8% of all consumer-grade genetic tests performed in China that year. Based on 2020 revenue, the company held a market share of 34.2%, significantly higher than that of its peers.

In the cancer screening industry, Meiyin Genetics isChina's Largest Genetic Testing Platform for Cancer Screening. As of June 30, 2021, Meiyin Gene was the only company to have cumulatively conducted more than 250,000 tests. In addition, in 2020, the gross profit margin of Meiyin Gene’s cancer screening services reached as high as 80.5%, significantly exceeding the industry average of 60.3% for Chinese peers in 2020.

Recently, Meiyin Gene submitted its prospectus to the Hong Kong Stock Exchange, planning to list in Hong Kong.Poised to become the first listed dual market leader in China with both consumer-grade genetic testing and cancer screening businesses.

This news has drawn even greater attention to the consumer-grade genetic testing and cancer screening sectors, thrusting MyGenomics into the spotlight for the first time. The public is naturally curious: as a benchmark enterprise in China, what successful experiences does MyGenomics offer that are worth learning from?

VCBeat conducted a detailed review of MeiYin Gene’s prospectus and found that its comprehensive, integrated layout across the upstream, midstream, and downstream segments—achieving full coverage of the genetic testing value chain—is the core factor enabling it to lead in the two major sectors of consumer-grade genetic testing and cancer screening.

In selecting service and testing offerings, Meinian Genetics is grounded in rigorous clinical medicine, bases its approach on evidence-based medicine, and leverages forward-looking market insights to develop genetic testing products for health management.

Health management projects are a rigid demand; although they start slowly, they possessReusableFeatures,Higher ceiling, enabling the construction of a complete closed loop, providing clinical significance interpretation services and personalized intervention measures to meet customers' health management needs, while also accumulating genotype data, phenotype data, and physical examination data,Establish a comprehensive, multi-omics database to empower new drug development.

Meiyin Gene is providing products and services urgently needed by the market for medical and healthcare scenarios such as hospitals, physical examination centers, and health management centers, promoting the rapid implementation of genetic testing and health management projects, and capable of offeringA diversified portfolio of 89 products with strong commercialization and profitability,of which approximately 90% are independently developed, covering diseases such as cancer, neurological disorders, and cardiovascular and cerebrovascular diseases.

Its product portfolio includes ApoE genotyping, folate metabolism capacity assessment, Parkinson’s disease risk assessment, comprehensive cancer risk assessment, cardiovascular and cerebrovascular disease risk assessment, genetic testing for hereditary breast and ovarian cancer, Septin9-based colorectal cancer screening, RNF180/Septin9-based gastric cancer screening, personal whole-genome testing, and adult whole-exome sequencing.

Cost-effectiveness is the key to triggering the explosion of the consumer-grade genetic testing and cancer screening market. Although the price of consumer-grade genetic testing in China has dropped from thousands of yuan to hundreds of yuan, achieving "universal accessibility" still requires further optimization of cost-effectiveness and a reduction in end-user prices.

MeinGene has established a low-cost, high-throughput, automated production system and an integrated technical platform system.Daily testing capacity of up to 50,000 tests, capable of delivering in a cost-effective mannerHigh-throughput, Automated, Multi-scenarioGenetic Testing Solutions.

Currently, Meiyin Gene has independently developed a range of proprietary technologies, including extraction-free blood nucleic acid technology, plasma cfDNA extraction and bisulfite conversion technology, plasma miRNA extraction technology, multiplex PCR library preparation and sequencing technology, as well as biomarker screening and modeling technology based on machine learning algorithms.

Meanwhile, Meiyin Genetics has a strict internal quality management system,The consistency between the test results and the industry gold standard is as high as 99.9%., can provide testing services with high accuracy and cost-effectiveness, promoting the widespread adoption of consumer-grade genetic testing and cancer screening.

Leveraging robust cost control, Meiyin Gene has delivered impressive net profit and gross margin performance, positioning it as a rare player in the industry capable of sustaining profitability. In 2020, the company’s consumer-grade genetic testing projects achieved a gross margin of 69.8%, while its cancer screening projects reached a gross margin of 80.5%, both significantly exceeding the industry average.

Downstream, Meiyin Gene has established an omnichannel sales network, cultivating a broad customer base and a high-quality customer structure.

Leveraging its brand strength, precise product positioning, and cost advantages, MeiYin Gene has gained widespread recognition from numerous hospitals and health examination centers. The company has established collaborations with many Grade 3A hospitals, and Meinian Onehealth, a leading enterprise in preventive medicine, is also a key strategic partner.Leveraging deep collaborations with hospitals and physical examination centers, Meiyin Genetics has successfully secured a key offline traffic gateway for preventive medicine.

Currently, Meiyin Gene has partnered with over 1,300 medical institutions across more than 300 cities in China.In addition, online platforms, insurance companies, and health management centers are also important sales channels for the company.

The “Healthy China 2030” Planning Outline requires that by 2030, the average life expectancy in China should reach 79 years, and the overall five-year survival rate for cancer among the entire population should increase by 15%. It also emphasizes adhering to the principle of prioritizing prevention while integrating prevention with treatment, strengthening screening for chronic diseases and early detection of malignant diseases.

Shifting the focus of disease prevention and control upstream has become a consensus, and the world is entering"Prevention is better than cure"Era. We believe that the cost of consumer-grade genetic testing and cancer screening will continue to decline, with prices expected to drop to the level of routine blood and urine tests.

With declining costs, increasingly mature market education, and the accumulation of genetic big data,An increasing number of consumer-grade genetic tests and cancer screenings will demonstrate clear clinical significance, becoming indispensable tools in clinical diagnosis and treatment as well as health management.

The value and superiority of consumer-grade genetic testing and cancer screening have been widely recognized by companies both domestically and internationally.Overseas, companies such as 23andMe and Ancestry, which have gained prominence for their ancestry testing services, are also actively developing health management-related testing programs. Grail has emerged as a global unicorn in pan-cancer early screening. In China, multiple enterprises have also entered the fields of consumer-grade genetic testing and cancer screening.

As can be seen, the firm commitments made by companies such as 23andMe, Ancestry, and Grail in the genetic testing and health management industry have yielded substantial returns. 23andMe’s market capitalization exceeds $3.6 billion; Blackstone acquired a 75% stake in Ancestry for $4.7 billion, setting a record for Blackstone’s largest single acquisition and pushing Ancestry’s valuation above $6 billion; and Grail was acquired by Illumina for $8 billion.

However, at the current stage, the penetration rates of consumer-grade genetic testing and cancer screening in China remain relatively low. In 2020, the penetration rate of consumer-grade genetic testing in China was only 0.8%, significantly lower than the 8.8% rate in the United States. In 2019, the penetration rate for colorectal cancer screening in China was 16.4%, far below the 60.1% rate in the United States. Also in 2019, the penetration rate for gastric cancer screening in China was 21.6%, lower than Japan’s rate of 43.0%.

This means that,China’s consumer-grade genetic testing and cancer screening markets still have vast room for expansion, presenting a significant opportunity for the emergence of a mega-cap industry leader.

It should be noted that,In the future, consumer-grade genetic testing and cancer screening will exhibit a highly centralized trend.Both consumer-grade genetic testing and cancer screening are characterized by low average transaction values and high traffic volumes, with consumers being extremely price-sensitive. The lower the cost, the stronger the scalability; thereforeScale and cost-control capabilities will become key competitive factors among enterprises.

Meinuo Gene has already established a first-mover advantage in scalability and cost control, with business volume comparable to that of leading overseas enterprises. It is poised to become a leading provider of affordable genetic testing services for the general public, making its future development and market capitalization performance worthy of anticipation.