GeneWell Biotech Files IPO Prospectus, Pioneering Molecular Diagnostics Reference Standards in China

Since 2015, the maturation of next-generation sequencing (NGS) technology and the resulting cost reductions have triggered a boom in the entire genomics industry. According to previously released statistics from VCBeat (WeChat ID: vcbeat), by the end of November 2017, total financing in China’s genetic testing sector had exceeded $1 billion, representing a year-on-year increase of 219%.

At the national level, genetic testing is positioned as a key industrial pillar in the top-level design for advancing precision medicine. In recent years, the government has introduced multiple policies to promote the clinical application of genetic testing in areas such as early screening for major diseases and personalized treatment.

Genetic testing is one of the few fields where China can achieve leapfrog development. Although genetic testing has attracted significant capital investment, it has also been plagued by occasional “black swan” events. One key reason is the frequent occurrence of false-positive and false-negative results, which severely constrain the industry’s growth.

Molecular diagnostic reference standards precisely address this industry pain point.

Previously, the primary supplier of molecular diagnostic reference materials in the international market was Horizon Discovery, a UK-based leader in genetic testing standards. Earlier this year, Horizon Discovery (HD) entered into a strategic cooperation agreement with Jingliang Gene. HD not only licensed Jingliang to use its cell lines as raw materials for reference materials but also fully transferred its production processes and quality control methodologies.

Subsequently, GenesWell completed the preparation and sales of reference materials through self-developed or collaborative R&D models. It is understood that GenesWell is, to date, the only company globally authorized by HD to use gene-edited cell lines, a distinction primarily based on HD’s trust in the globally leading professional expertise of Dr. Wei’s team at GenesWell.

Prior to the establishment of GeneBench, the domestic market for molecular diagnostic reference materials was virtually untapped. To pioneer this market and enhance the accuracy of genetic testing, Dr. Wei Liangshen and Dr. Li Jinghua, both PhD graduates from the University of Cambridge, founded GeneBench. In the future, GeneBench will continue to expand its portfolio of reference materials, providing molecular diagnostic standards to users in China and worldwide, while committing to advancing the standardization of China’s molecular diagnostics industry.

The field of genetic testing is experiencing rapid and robust growth, yet the supply of corresponding reference materials remains relatively lagging. This has resulted in different laboratories employing varied genetic testing methods, lacking unified reference standards, and missing qualitative and quantitative reference materials for monitoring testing methods and platforms.

This latent issue is a pain point for all stakeholders in genetic testing.

For pharmaceutical companies, with the advent of the era of precision oncology, genetic testing has become an indispensable component in drug development and clinical precision medication. However, there is currently no unified standard across product development, clinical testing, and quality control processes. Externally, companies are unable to assess the accuracy and sensitivity of products from third-party testing laboratories; internally, they cannot evaluate their own products.

Dr. Wei Liangshen, founder of Jingliang Gene, told VCBeat, “Genetic testing demands high accuracy and sensitivity; however, the industry lacks a unified reference standard. As genetic testing is increasingly applied in clinical settings, these issues will become even more pronounced when facing patients.”

Reference standards are to the molecular diagnostics industry what the International Prototype of the Kilogram, housed at the International Bureau of Weights and Measures in Paris, is to the kilogram.

Gene reference standards are utilized across the entire genetic testing industry chain. Instrument developers and reagent manufacturers at the upstream stage can use these standards during research and development to assess the accuracy and sensitivity of their product designs. After commercialization, reagent manufacturers may include reference standards in their test kits to provide positive and negative controls for associated assays. For public institutions, reference standards are also required when public health authorities conduct accreditation of molecular diagnostic laboratories or third-party testing organizations, enabling proficiency assessment of medical testing laboratories.

In addition, pharmaceutical companies also require reference standards for molecular diagnostics. In the context of companion diagnostics, pharmaceutical companies need to precisely define the indicated population for their drugs. For targeted therapies, suboptimal efficacy can lead to the risk of market withdrawal. Therefore, precision medicine is a critical necessity for pharmaceutical companies. In this regard, pharmaceutical companies also rely on reference standards to evaluate the testing capabilities of their third-party laboratory partners.

Dr. Wei Liangshen, founder of Jingliang Genetics, stated, “In general, reference materials should be used at every stage of genetic testing. In addition to helping verify the accuracy, sensitivity, and stability of the product itself, reference materials can also determine whether a given test has been successfully performed.”

In the genetic testing workflow, from sample collection to analysis, the process involves numerous steps, and human-induced bias can occur at any stage. Reference standards serve as a “litmus test” in this context. As their use becomes more widespread across the industry, they are increasingly functioning as the de facto industry standard.

Currently, Genesky Biotechnologies’ primary products are reference standards for tumor genetic testing. Leveraging leading-edge technology licensing and its independently developed, high-quality standardization system, the company researches, develops, and manufactures premium, comprehensive, renewable reference standards that support both qualitative and quantitative analysis. Beyond the oncology sector, Genesky Biotechnologies plans to expand its existing platform over the next two years into areas such as maternal and child health testing, genetic disorders, rare genetic diseases, and direct-to-consumer genetic testing. Furthermore, given the transferability of its technologies, the company is also preparing to initiate the development of reference standards for other fields, including infectious diseases, in the near future.

Spanning the entire industry implies a vast market potential. China has a large population base for cancer, with over 4 million new cancer cases diagnosed annually, which in turn drives the growth in demand for corresponding in vitro diagnostic (IVD) genetic testing. Li Jinghua, founder of Jingliang Gene, stated, “The IVD market is valued at hundreds of billions of yuan, with next-generation sequencing (NGS)-based genetic testing accounting for a significant share. As a segment within the upstream supply chain of the IVD industry, we conservatively estimate that the market for reference standards alone ranges from several billion to tens of billions of yuan.”

Currently, well-known domestic companies such as BGI, Burning Rock, and Annoroad have all incorporated Genesand’s products into their kit development.

Dr. Wei Liangshen and Dr. Li Jinghua, the two founders of GeneWell, both graduated from the University of Cambridge. Dr. Wei Liangshen previously served as President of the Cambridge University Entrepreneurship Society. While they may be novices in entrepreneurship, the two doctors are seasoned veterans with many years of deep expertise in the industry.

Dr. Wei Liangshen previously served as the Director of New Product Development and Asia-Pacific Director at Horizon Discovery, where she participated in the development of the world’s first gene testing reference materials. The reference materials she designed were awarded a Top 10 Global Innovation Award by The Scientist. During her tenure overseeing new product technology R&D, she contributed to the planning of the European Union’s cell-free DNA (cfDNA) laboratory quality assessment program. The cfDNA reference materials developed under her leadership were utilized in the R&D of Roche’s FDA-approved products and in AstraZeneca’s global third-party testing programs. Dr. Li Jinghua, meanwhile, was responsible for establishing and building Horizon Discovery’s China team and spearheading the expansion of its Asia-Pacific business.

Choosing to return to China and enter the molecular diagnostic reference material industry at a time when the genetic sector was experiencing its most rapid growth, Dr. Li Jinghua stated, “GeneWell has filled a market gap, which is one of our major advantages. Generally, once collaborations are established, companies do not change their raw material suppliers. Another advantage is first-mover advantage: the earlier a product enters the market, the greater its market coverage and user base will be, creating a recognized consensus effect that helps maintain a leading market position.”

Previously, Jingliang Genetics secured angel-round funding from Miracle Light, a fund under BGI Group.