GrandOmics Files IPO Prospectus as ¥10,000 Third-Generation Whole Genome Sequencing Opens the Door to Grassroots Clinical Markets

Wang Depeng, CEO of GrandOmics Biosciences, was first exposed to third-generation sequencing technology in 2009. At that time, rumors circulated that the third-generation technology could complete whole-genome sequencing within 15 minutes at a cost of approximately $1,000, shocking the entire world.

However, empirical data revealed that third-generation sequencing platforms fell far short of expectations in terms of both sequencing results and costs, sparking significant global controversy over the technology. “The error rate of single-molecule sequencing has remained around 15%; without specialized algorithms, the data are largely unusable.” At that time, the entire industry maintained a relatively conservative stance toward this technology.

Time moved forward to 2012. During a challenging plant genome assembly, Wang Depeng and his team made multiple attempts using second-generation sequencing data but failed to resolve the issue. After approximately three months of literature review, he discovered that combining third-generation and second-generation sequencing could potentially solve the problem that had long plagued them.

Action speaks louder than words. Wang Depeng’s team promptly initiated testing, employing third-generation sequencing as the primary method and using second-generation sequencing to correct the results, which significantly improved the completeness of genome assembly. This successful experience bolstered Wang Depeng’s confidence in the prospects of third-generation sequencing for genome assembly. Six months later, GrandOmics Biosciences began deploying third-generation sequencing technology, becoming the first company in China to offer services in this application area.

At that time, the error rate of Oxford Nanopore sequencers was around 30%, and even engineering prototypes were difficult to obtain. Meanwhile, the cost of performing whole-genome sequencing at 10X coverage for a single individual on another third-generation sequencing platform often exceeded RMB 100,000.

From 2013 to 2018, GrandOmics primarily leveraged third-generation sequencing platforms to provide technical services for scientific research. With error correction enabled by second-generation sequencing, third-generation sequencing can now meet a wide variety of research needs; however, its error rate and cost remain unacceptable for clinical applications. In the clinical testing market, second-generation sequencing continues to dominate.

Wang Depeng believes that the main reason next-generation sequencing (NGS) has become the mainstream technology in precision medicine is that it has undergone a long period of development, supported by comprehensive databases and algorithms, as well as extensive clinical sample data for validation. However, it is undeniable that the detection rate of NGS does not fully meet clinical needs; for instance, the overall detection rate for genetic diseases remains below 50%.

“We hope to partially address the remaining 50% through third-generation sequencing,” stated Wang Depeng. “Apart from third-generation sequencing, it is difficult for other existing technologies to achieve this.” More than 50% of the human genome consists of repetitive sequences. Due to their short read lengths, second-generation sequencing technologies are unable to accurately resolve these repetitive regions.

Likewise, due to the short read lengths of second-generation sequencing, large structural variants, microsatellite tandem repeats, and haplotype information have historically been challenging or even blind spots in clinical testing. The emergence of third-generation long-read sequencing technology will perfectly fill these gaps in previous clinical diagnostics.

Third-generation sequencing technologies from PacBio and Oxford Nanopore hold advantages in both read length and sequencing speed. In particular, Oxford Nanopore sequencers can achieve read lengths exceeding 1 Mb (one million base pairs) and simultaneously detect DNA methylation modifications during the sequencing process. Wang Depeng predicts that third-generation sequencing is poised to become the mainstream technology for genetic disease testing in the near future.

When ideals meet reality, the journey is often fraught with challenges. GrandOmics Biosciences began exploring the application of third-generation sequencing in clinical genetic disease testing as early as 2014, but the path has not been smooth. “We initiated relevant research in 2014, but it was only recently that we started collaborating with a small number of hospitals. Over the years, we have addressed numerous challenges, spanning algorithm development, workflow optimization, and database construction,” he stated.

The core reason is that algorithms for third-generation sequencing are less mature than those for second-generation sequencing, and open-source software is difficult to access. As a result, many commercial companies are deterred and choose to withdraw from this field. GrandOmics Biosciences is the world’s first commercial company to use third-generation sequencing for genetic disease testing.

Wang Depeng joked that the company appears not only isolated within China but also stands alone on the global stage. “We cannot find peers domestically, nor can we find them at major medical genetics conferences in the United States, such as those hosted by the ACMG and ASHG. Over the past two years, we have been the only enterprise providing precision medicine technical services involving third-generation sequencing.”

With no prior experience to draw upon and no established models to replicate, GrandOmics had to forge its own path through trial and error. Throughout this process, the greatest challenge they faced was team building, as both the experimental R&D team and the bioinformatics R&D team imposed exceptionally high demands on every member and individual. Consequently, in assembling their team, GrandOmics demonstrated an utmost pursuit of professional expertise and industry experience.

CEO Wang Depeng graduated from the School of Life Sciences at Peking University and subsequently joined BGI Genomics, where he led and participated in a series of promotional initiatives for first-generation and next-generation sequencing technologies. By closely tracking the evolving trends of the sequencing industry, he successfully capitalized on nearly every critical juncture.

CTO Wu Xin studied under Luo Jingchu, a renowned bioinformatics expert in China. He previously served as Vice President of Zhongtong Ruanlian Open Source Consulting Co., Ltd., China Application Architect at Monsanto, a globally renowned multinational agricultural company, and Bioinformatics Scientist at Monsanto Biotechnology Co., Ltd. He has nearly two decades of experience in the fields of bioinformatics, genomics R&D, and IT consulting services.

CSO Liu Shanlin graduated from the University of Copenhagen. He served as the principal investigator or participated in a series of major projects, including the National High-Tech Research and Development Program (863 Program), the National Science and Technology Support Program during the 12th Five-Year Plan period, and the Shenzhen Free Exploration Research Program. As a core researcher, he has published more than 30 articles in internationally renowned SCI journals such as Science, NAR, PNAS, GigaScience, and Current Biology, which have been cited thousands of times, with 10 papers published as corresponding or first author.

“Many companies are reluctant to take this path, but we have an excellent team of partners and investors who place great trust in our team and possess considerable patience,” he added. In conversations with Wang Depeng, one quickly realizes that he is extremely demanding of himself. Anticipating that next-generation sequencing (NGS) was about to enter a phase characterized by price wars and channel dominance, he decisively pivoted to the more niche third-generation sequencing technology, believing that this strategic choice offered greater innovative value.

“But this really tests an investor’s judgment,” Wang Depeng continued. Initially, he also worried that the direction he was committed to might not gain investor recognition. However, with the participation of leading firms such as Matrix Partners China and Yuanyi Capital, along with the rapid advancement of the company’s internal R&D, Wang has grown increasingly confident in his vision. “Many companies are vying for the same broad strategic directions, but it is essential to lay the groundwork well in advance.”

To date, GrandOmics has established a significant lead in genetic disease diagnosis and assisted reproduction based on third-generation sequencing; even with new entrants emerging, it remains difficult for them to keep pace with GrandOmics.

In 2016, the error rate of Oxford Nanopore sequencers was approximately 30%. After several consecutive upgrades and iterations, the current error rate for human genome sequencing has approached 5%. “This has minimal impact on the detection of structural variants and methylation, as these analyses are not highly sensitive to single-base accuracy.” Discussing this point, Wang Depeng expressed some frustration with the prevailing industry perception that third-generation sequencing is still limited to research applications. “The error rate has improved significantly, and costs continue to decline.”

“No technology is perfect, but we can compensate for its shortcomings by developing software and algorithms and by correcting data,” said Wang Depeng.

Historically, the greatest advantages of next-generation sequencing (NGS) were its low cost and high throughput, while third-generation sequencing (TGS) consistently held the upper hand in read length and sequencing speed. However, with Oxford Nanopore’s launch of the PromethION 48 sequencing platform, the cost of TGS has approached that of NGS, and its throughput now matches the highest levels of NGS, generating approximately 5–8 Tb of data in about three days. He believes that as TGS continues to advance rapidly, the advantages of NGS will gradually diminish. Once TGS resolves the issue of single-base accuracy and enables direct SNP identification, it will become the dominant technology in most application scenarios.

Not only that, third-generation sequencing may also become the key to unlocking the primary healthcare market for sequencing technologies. Third-generation sequencers are not picky about sequencing environments; NASA even completed sequencing in space using Oxford Nanopore’s sequencers. These more compact instruments do not require dedicated laboratories, and their prices are not in the millions like those of second-generation sequencers. Even community hospitals may have the capability to establish third-generation sequencing platforms. Furthermore, due to simpler workflows, third-generation sequencing offers faster sequencing speeds.

Wang Depeng told VCBeat that the turnaround time for a genetic disease test using third-generation sequencing is approximately one week, including time for manual annotation, whereas second-generation sequencing takes nearly a month. With further process optimization, they even aim to achieve same-day reporting within two years.

Cost and reliability are key indicators for assessing the suitability of a technology for clinical use. Wang Depeng believes that the price point of RMB 10,000 per whole-genome sequencing test may represent a watershed moment in the development of third-generation sequencing technologies, potentially driving their rapid expansion in clinical applications.

In the early stages of applying third-generation sequencing to clinical practice, GrandOmics took many detours due to cost and accuracy concerns. However, as the cost of third-generation sequencing has decreased, the value of its prior investments and strategic layout has been realized.

In one project, they encountered a patient from Yunnan whose family had been affected by the same genetic disease for five to six generations. After first-generation and second-generation sequencing failed to identify a clear pathogenic cause, GrandOmics Biosciences conducted third-generation sequencing-based genetic testing on the family and discovered that the disease was caused by a 6-million-base-pair inversion mutation.

“The patients told us that this has resolved the ‘curse’ affecting their family, and we are equally excited,” said Wang Depeng. “We can address issues that neither first-generation nor second-generation sequencing technologies could resolve, and through genetic analysis, these data can provide clinicians with actionable information for clinical intervention and guidance.” Regarding costs, Wang revealed that the expense of 15x whole-genome sequencing using third-generation technology has now been brought under RMB 10,000.

“This technology will surely soon become a key tool for genetic disease testing,” he stated. As the world’s first company to employ third-generation sequencing for genetic disease testing, GrandOmics Biosciences is poised to enjoy a significant first-mover advantage.

Wang Depeng revealed that the company has achieved promising results in addressing the diagnostic challenges of balanced translocations in assisted reproduction. Even with clinical-grade whole-genome sequencing, they can precisely identify breakpoint locations using only third-generation sequencing data at a 15X depth, which is highly attractive to patients seeking solutions. GrandOmics Biosciences has already tested a substantial number of samples, with two papers published in prestigious international journals and one currently under submission.

Wang Depeng told VCBeat that his aspiration is to make third-generation sequencing one of the mainstream methods for genetic disease testing worldwide through GrandOmics Biosciences. “The technology was immature, but we have matured it,” he stated. He plans to achieve the ambitious goal of enabling rapid diagnosis for all types of genetic mutations within two to three years.

After years of accumulating expertise in the clinical application of third-generation sequencing, Wang Depeng hopes his company will achieve breakthroughs beyond genetic disease testing. He is highly optimistic about the applications of third-generation sequencing in assisted reproduction, tumor detection, and microbiological testing, as well as the future value of big data. “The application scenarios for third-generation sequencing are extensive, and we will certainly expand our strategic footprint,” said Wang Depeng.