Berry Genomics Chairman Gao Yang: Tumor Screening to Become the Second Growth Curve for NGS by Replicating the NIPT Momentum Gap

Gao Yang, Chairman of Berry Genomics

Over the past decade, Berry Genomics has been accelerating its internal innovation.

Since the beginning of this year, Berry Genomics has undertaken a series of significant initiatives. In May, its application for registration of the Chromosomal Copy Number Variation (CNV) Detection Kit was accepted, making Berry Genomics the first company in China to file such an application. In July, HeRui Genetics, a subsidiary in which Berry Genomics holds a stake, launched the new “He Quan An” series of large-panel genetic tests—specifically, a comprehensive pan-target genetic test for solid tumors. This test covers 654 genes and common immune checkpoint markers, representing the most comprehensive companion diagnostic sequencing kit currently available in China. In August, HeRui Genetics further introduced the PreCar project product, “Laishining (LiverScreening).” This clinical-grade product, validated by the world’s largest prospective study on early liver cancer screening, was initially implemented through the Laboratory Developed Tests (LDT) model, accelerating its commercialization timeline ahead of previous expectations.

The launch of Berry Genomics’ multiple blockbuster oncology products, along with the accelerated commercialization of its early liver cancer screening product, indicates that the pivot point for Berry Genomics’ second growth curve lies in oncology.

For the entire genetic testing industry, the current capacity of existing commercial scenarios does not match the development level of sequencers and sequencing technologies. The key challenges and priorities for industry growth lie in identifying market increments through new application scenarios. Berry Genomics’ approach to addressing this industry challenge is to tap into the oncology market.

Compared with the environment when Berry Genomics was founded ten years ago and achieved industrialization of NIPT technology, the regulatory, talent, technological, and social landscapes that Berry Genomics faces today in forging a second growth curve in the oncology sector have undergone comprehensive changes. Creating a second NIPT-like scenario cannot be achieved through simple replication.

Why Did Berry Genomics Choose Liver Cancer as the Starting Point for Its Second Growth Curve? What First Principle Did Berry Genomics Identify in Its Leap from NIPT to Oncology? To address this question, VCBeat (WeChat ID: vcbeat) interviewed Gao Yang, Chairman of Berry Genomics, in Beijing during the year’s first snowfall.

Reviewing the evolution of China’s genetic testing industry, Gao Yang has been both a witness and a practitioner.

The concept of NIPT had been in development since 2007, when Dr. Zhou Daixing, one of the founders of Berry Genomics, approached Professor Dennis Lo of The Chinese University of Hong Kong, known as the “father of NIPT” for his discovery of cell-free fetal DNA in maternal plasma, leveraging next-generation sequencing technology.

In 2010, Zhou Daixing, Hou Ying, and Gao Yang, armed with NIPT technology that was once viewed with skepticism, decided to embark on an entrepreneurial venture. In May 2010, Berry Genomics was established in a rented office in Tower B of the Shuguang Building at Sanyuanqiao, Beijing.

Over the following decade, Berry Genomics achieved remarkable success by industrializing non-invasive prenatal testing (NIPT) technology and becoming the first company worldwide to offer NIPT services. Between 2010 and 2011, it established clinical collaborations with Xiangya Hospital and Peking Union Medical College Hospital in succession. In 2015, its NIPT product received approval from the China Food and Drug Administration (CFDA), and its oncology diagnostic products were launched. The company went public through a reverse merger in 2017, evolving into one of the most prominent companies in China’s genetic testing sector.

For an industry, a decade may not seem particularly long. Yet no business model or entrepreneurial wave remains static; for Gao Yang, who works in the gene sequencing sector, the industry has undergone profound transformations.

A decade ago, the gene sequencing industry was dominated by instrumentation, with little attention paid to breakthroughs in application scenarios. Now that gene sequencing technology itself has matured to a certain level, the market landscape has undergone significant changes,Sequencing technologies have advanced significantly, but the market lacks sufficient application scenarios to absorb these capabilities.

Dr. Zhou Daixing has stated that Illumina is already capable of offering whole-human-genome sequencing at a cost of $100. However, the company has not yet launched this product, as there is currently no application scenario requiring such a large volume of human genomic data.

Identifying the next success story akin to NIPT is not only a challenge for Berry Genomics but also a formidable hurdle for the entire industry.

Currently, gene sequencing is widely applied in numerous fields, including basic research, clinical diagnostics, new drug development, public health, and health management. Among these, non-invasive prenatal testing (NIPT) represents the largest commercial application of gene sequencing technology. Identifying the next major market segment akin to NIPT requires drawing on the developmental experience of NIPT. In this process,Gao Yang believes that simply summarizing past NIPT experiences cannot effectively guide entrepreneurs in adapting to a dynamically changing business environment.

Many people believe that the core reasons for the explosive growth of the NIPT sector and Berry Genomics’ success lie in their ability to capitalize on the dramatic increase in throughput brought about by breakthroughs in next-generation sequencing (NGS) technology, which significantly reduced sequencing costs. It was this technological surge that made the success of the NIPT application possible.

While the widespread adoption of technology was certainly one of the prerequisites for the explosive growth of the NIPT category, it fails to explain why Berry Genomics was the first to recognize the potential of this technology, and why sequencing giants Life Technologies and Illumina both missed this opportunity at the time.

Gao Yang stated, “In reviewing past experiences, many people believe that technological breakthroughs lead to the emergence of new products. However, I do not fully agree with this view. Basic scientific research is relatively fragmented, and technological breakthroughs are somewhat random in relation to the commercialization of specific products. The key to the success of NIPT (Non-Invasive Prenatal Testing) products lies in their significant competitive advantage over previous-generation solutions. Their benefits are markedly superior to those of earlier products, as they identified a sufficiently large market scenario where their advantages were particularly pronounced.”

Gao Yang’s perspective aligns closely with the concepts articulated by Harvard Business School professor Clayton Christensen in his Innovation Trilogy. Contrary to popular belief, Christensen emphasizes that the crux of innovation lies not in technological advancements, let alone scientific discoveries, but in the proactive response to market shifts.

How to Proactively Respond to Market Shifts: Gao Yang Believes the Key Lies in Accurately Grasping the Social Needs That Products Can Address Over the Next Five Years, Emphasizing That Envisioning Future Demands Should Not Simply Rely on Past Experience.

Relying solely on past experience can easily lead to disconnection from a rapidly changing society.

He cited the COVID-19 pandemic as an example, noting, “Prior to COVID-19, we had experienced the SARS outbreak. If we had relied solely on past experience to make judgments, we would likely have assumed that COVID-19, like SARS, would be short-lived under comprehensive containment measures such as social distancing, international travel restrictions, and testing. Clearly, such a simplistic reliance on historical precedents to assess modern societal dynamics deviates significantly from reality.”

Meanwhile, the rapid societal shifts are also reflected in the reshaping of the healthcare industry by the COVID-19 pandemic. The state of the healthcare sector has undergone significant changes before and after the outbreak.

First, there has been a shift in public awareness. Under the impact of the COVID-19 pandemic, the IVD industry may have compressed a decade’s worth of development into a much shorter period. Nucleic acid testing became a topic of national discussion, and its operational efficiency improved significantly. Within just a few months, the public’s perception of the healthcare industry underwent substantial changes. Previously, it was commonly believed that Chinese consumers’ spending habits resulted in low willingness to pay for health services, particularly among young and middle-aged adults. However, this trend is likely to change considerably in the post-pandemic era.

The second impact of the COVID-19 pandemic is the promotion of networked healthcare systems across China.

Gao Yang pointed out: “Due to the needs of infectious disease prevention and control, every tertiary hospital in each prefecture-level city must have nucleic acid testing capabilities. From the decentralization of frontline prevention efforts to the sharing of防控 information, a medical network was rapidly established. We estimate that this networking will significantly impact the future gene sequencing industry, with products facing the end market more directly and undergoing commercial viability tests within shorter cycles. This is different from the past, when products had to go through agents and distribution channels before entering the market.”

Therefore, over the past decade, as Berry Genomics has perceived and adapted to the evolving landscape of the genetic testing industry through self-renewal, it has also developed a systematic methodology for product selection and lifecycle management within the emerging NGS sector.

Gao Yang stated that when Berry Genomics selects product categories, it must adopt a forward-looking perspective by envisioning the market at a future stage of development. This involves assessing what the socio-ecological landscape will look like, identifying the decisive resources and factors, and determining which resources possess exclusivity or scarcity. Only then can the company devise strategies to overcome these barriers and secure greater room for growth.

Except for COVID-19-related diagnostic products, which took only a few months to go from outbreak to plateau, for other categories,We need to envision and prepare for the social demands of the next five years.Product lifecycle management is, in fact, relatively dynamic.

Berry Genomics has focused on genetic birth defects, continuously experimenting and exploring within the specialty of medical genetics. The next high-growth application scenario that Berry Genomics is optimistic about is the oncology market. It believes that following NIPT, testing methods such as WES (Whole Exome Sequencing) will gradually gain traction in the mid-to-late stages of cancer, and even in early cancer diagnosis.

In early cancer screening, Berry Genomics has chosen liver cancer, a relatively less popular field.

Gao Yang stated, “In fact, whether it is NIPT or tumor testing, the maturation of any application scenario requires many prerequisites, including clinical demand, technological capabilities, and regulatory frameworks. It is the combination of these different factors that ultimately leads to a product’s maturity. Conversely, to identify promising product candidates, one must have a fundamental understanding of the product’s application domain. Regardless of whether it is in technology services, healthcare, or agriculture, you need to form a basic judgment on the development of that field over the next five years.”

So, how does Berry manage a product's lifecycle over the next five years?

Gao Yang proposed three dimensions: first, grasp the market positioning of the product itself; second, understand what the existing solutions are and whether there is a sufficient potential energy gap between the new solution and the existing ones. Third, identify the obstacles to commercialization under current social conditions, such as regulation, R&D, technology, and the availability of human, financial, and material resources.

Why liver cancer was selected for early tumor screening: Berry Genomics also conducted model-based projections.

Based on the existing market landscape, while companion diagnostics represent the largest market for genetic testing in oncology, they are not necessarily the most significant application scenario within the field. Products such as early cancer screening and pan-cancer early screening hold substantial market potential.

How to Make Decisions in Blue Ocean Markets: It’s Not Just About Technical Barriers; the Greater Challenge Lies in Maintaining Independent Thinking and Grasping Future Societal Needs.

When Berry Genomics explored the "genetic testing + oncology" sector, its market analysis revealed that disparities in early screening and diagnosis across different cancer types are correlated with variations in medical service capabilities, rather than being caused by technological limitations. In some cases, there is a lack of technical screening methods, as different cancer types are suited to different screening approaches. Therefore, beyond technological breakthroughs, the "genetic testing + oncology" model must also prioritize market demand.

Taking pan-cancer screening as an example, Gao Yang analyzed: “Choosing pan-cancer screening as a R&D direction demands resources and capital beyond the capacity of most companies, and carries a high risk of failure. Analyzing demand based on the characteristics of China’s public healthcare system, we observe two key features: first, uneven development; second, a trend toward specialization. We believe that specialists have limited demand for pan-cancer early screening, as the nature of specialized care requires precise and definitive diagnostic conclusions. Therefore, if the future development of oncology in China continues to move toward greater specialization, this implies significant risks for the development of pan-cancer screening. However, if a unified discipline of oncology emerges in China in the future, there will be strong demand for pan-cancer screening.”

Determining strategic choices from the perspective of future market development trends has also brought greater composure and calm to Berry Genomics’ internal team, strengthening their conviction in the ultimate triumph of long-termism.

Gao Yang stated, “If I am to look ahead three to five years into the future, my first priority is to ensure my own survival through this period in a steady and pragmatic manner. I will not engage in quick-in, quick-out arbitrage strategies. This approach allows us to maintain our own pace, whether during industry booms or downturns.”

In Gao Yang’s view, the gene big data industry has experienced another minor surge in development during this period due to the impact of the pandemic.

Gao Yang also bluntly stated that the entire genetic testing industry is rather impetuous, and the inability of stakeholders to remain rational and calm is effectively overdrawing the industry’s long-term viability.

Genes are the fundamental language of our biological makeup, carrying our material foundation and preserving the information passed down through generations. Since its inception in the genetic testing industry, Berry Genomics has been committed to sustainable long-term operations. As Berry Genomics achieves breakthroughs across various application scenarios and accumulates vast amounts of biological data, it will build a massive database, enabling genetic data to deliver greater value in an expanding range of contexts.

In the interview, Gao Yang also shared his views on how breakthroughs in individual scenarios have led to the deciphering of the genetic code.

“The ideal future realization of data value may involve our ability to discern certain biological characteristics from data and derive conclusions with strong correlations. Genomic data alone holds limited value; it must be integrated with multidimensional datasets and various phenotypic data to fully realize its potential.”

At this stage, Gao Yang believes that the only viable approach is to acquire and preserve genetic and phenotypic data through methods with relatively controllable costs. The greatest challenge here lies in data quality. Unlike software data, which can be cleaned and governed within the software industry, individual genetic data incurs certain acquisition costs and cannot be subjected to individual-level cleaning; therefore, quality is paramount. In the future, as data on phenotypes, metabolism, organs, diagnosis and treatment, and healthcare costs accumulate, and as validation of population-level effectiveness advances, we will evolve into an interconnected data ecosystem. All current efforts will ultimately yield tangible results.

“Currently, there are still few independent thinkers in the industry, and most tend to follow the crowd. In fact, the tumor type market best suited for gene sequencing should be hematologic malignancies; however, few companies have truly committed to excelling in this area. Instead, most have flocked to the field of solid tumors, leading to redundant capacity expansion. The domestic industry is also heavily influenced by overseas trends, which is indeed a pity.”Practitioners in China lack the confidence to reflect on the inherent development logic of the genetic testing industry.”

This statement by Gao Yang precisely captures the rationale behind our launch of the “Pioneer” interview series: Chinese founders and entrepreneurs are now treading an uncharted path, with fewer role models to learn from. Increasingly, we must formulate our own questions and seek answers independently. The insights shared by leading entrepreneurs across various specialized sectors will profoundly shape the future landscape of our industries, business practices, and commercial ethics.

“Thirty years of deeds are but dust and dirt; eight thousand li of journey are cloud and moon.” In the rapidly evolving genomics industry, a decade is merely a new starting point for Berry Genomics. Amidst continuous self-reinvention, Berry Genomics must resist the gravitational pull of past successes, adapt to and embrace market challenges, and actively engage in global competition.

“Genetic testing represents a vast ocean for practitioners in our field, yet the number of professionals engaged in genetic testing remains relatively small compared to the broader healthcare community.

“Since there are still plenty of opportunities, we should just focus on working steadily and diligently.”