HYK Genomics and Dr. Sheng Sitong: A Rapidly Expanding Gene Company Surpassing 600 Competitors
Sheng Sitong, President and Chief Scientist of Huayinkang Gene
On December 23, Mr. Sheng Sitong, President and Chief Scientist of Huayinkang Gene, was invited to deliver a keynote speech titled “The Wild Growth of Innovative Gene Technologies in the Healthcare Industry” at the VCBeat Future Healthcare Top 100 Forum. Below are the highlights from his speech:
The genetics industry is currently experiencing wild, unregulated growth. Why? Technological and product innovations are breaking through the constraints of traditional policies and regulations, spawning new fields and applications. The vast market demand and capacity are attracting an influx of capital and talent. Because it is novel, it remains free from restrictive rules; because it is novel, it offers immense room for imagination, along with both opportunities and challenges. Applications, technologies, products, and policies and regulations will all undergo friction, compromise, and development through a process of strategic interaction, ultimately leading to standardized, spiral-like growth.
Since its discovery in the 20th century, the structure of DNA has been recognized as one of the three most significant scientific breakthroughs of that era. In the field of life sciences, the structure of genes, serving as the genetic code and material basis of heredity, holds the key to humanity’s understanding of life and the unraveling of its mysteries.
Genes are the genetic code of living organisms. Dragons beget dragons, and phoenixes beget phoenixes—why? Because genes can be passed on to the next generation through replication, thereby continuously sustaining the process of life.
However, scientists have discovered that although the genetic correlation between humans and monkeys is very high, with a difference of less than 1%, the phenotypic differences are vast. In terms of humans, this variation is also evident. Among the world's population of 6 billion, each individual’s genome is unique; even identical twins are not genetically identical.
Why do racial differences exist, and why are there variations among individuals? Why do celebrities look attractive? Why do eye color and hair color differ across races? All these traits are determined by genetic differences. Genes are heritable and dictate many physical and personality traits, and even influence intellectual development.
More importantly, with the advancement of medicine and a deeper understanding of genetics, scientists have discovered that genes play far more significant roles beyond individual variability. First, approximately 5,000 to 6,000 human diseases are associated with gene expression; alterations and variations in gene expression are the fundamental causes of disease onset. Therefore, effective treatment must address the root cause by targeting solutions at the genetic level. This perspective has gained increasing recognition within the scientific community as clinical data accumulate and research progresses.
Research and exploration of genes have provided scientists with new avenues for the diagnosis and treatment of diseases. Over the past few decades of medical advancement, substantial research achievements have been made in understanding the impact and association of genes with diseases. In the present and foreseeable future, gene-based research will become a key focus in human disease diagnosis and treatment. Genetic approaches will play a crucial role in helping humanity overcome diseases, enabling significant breakthroughs in addressing human health challenges.
Gene-based diagnosis and treatment of diseases rely primarily on genetic testing and gene sequencing technologies. Since 2004, sequencing technology has witnessed rapid advancement. Next-generation sequencing (NGS) is playing an increasingly significant role in medical testing, diagnosis, and treatment. Continuously emerging new technological platforms provide superior means, lower costs, and more precise methods for acquiring genetic information, thereby enabling deeper research into diseases, offering robust support for the application of genetic technologies, and creating new market opportunities.
In China, the genetic industry is developing rapidly. In just a few years, more than 600 companies engaged in genetic testing and gene sequencing have emerged, with no signs of this growth slowing down.
Why has development been so rapid, and why does it have such a strong appeal for capital and talent? The main reasons are as follows: First, the application prospects are extremely broad. Thousands of diseases are associated with genes, including currently confirmed conditions such as cancer, cardiovascular and cerebrovascular diseases, and many other chronic illnesses. This represents a huge market with tremendous allure; therefore, the number of companies engaged in genetic testing services or the development of genetic testing technology products will only continue to grow. Second, this growth is inseparable from the recognition by the investment community of the industry’s future potential. A surge of capital has enabled these companies to expand rapidly. Third, industry standards have not yet been established, allowing various players to compete using their unique strengths. In the process of forming an industrial chain, significant opportunities exist across all segments—upstream, midstream, and downstream.
In fact, the barriers to entry for developing upstream products in gene sequencing are extremely high. Currently, there are few companies truly engaged in this upstream sector. Internationally, the market is dominated by two U.S. companies, Illumina and Thermo Fisher, while Huayinkang is a notable player in China. The midstream segment, which provides gene testing services, has the largest number of enterprises, with over 600 companies accounting for approximately 90% of the industry. The downstream segment consists of the end users of gene testing.
Sequencing technology itself is mature; however, its application in the healthcare and diagnostic sectors remains an emerging industry. This field is currently characterized by intense competition among numerous players. In the coming years, as the industry matures, various types of industry giants will emerge, originating from companies that currently hold or will come to control upstream resources. Only by ensuring continuous advancement and development in upstream technologies can we directly drive progress in the midstream and downstream segments of the industry.
Currently, genetic testing technology is widely applied in the fields of reproduction, general health, oncology diagnosis, and cardiovascular disease. In the realm of health management, consumer-grade genetic testing services and products are gradually entering the market.
Particularly in the past one to two years, the involvement of commercial insurers and large-scale health management and physical examination companies in the genetic testing technology industry has accelerated its growth. This external factor will serve as another driver for rapid market expansion.
Huayinkang Gene has made forward-looking strategic layouts in medical devices, diagnostics, and other areas. Huayinkang Gene was the earliest and most active participant in clinical healthcare. We have amassed extensive clinical data, particularly in oncology and cardiovascular and cerebrovascular diseases. Although these data do not yet generate substantial economic value, I believe that with the development of diagnostic, testing, and medical service applications in the coming years, the volume of data will continue to grow, leading to a geometric increase in its value.
Precision medicine gained significant momentum in 2015, driven by advances in the precise diagnosis and treatment of cancer. Over the past decade, the accumulation of genomics technologies and data has deepened our understanding of oncology. This field has evolved from initial imaging-based detection and diagnosis, as well as conventional pathological diagnosis, to molecular pathological diagnosis. Such advanced analyses enable further characterization of tumors, helping to elucidate their etiologies and mechanisms, and to identify therapeutic strategies, most notably precision pharmacotherapy.
Precision medication is not a new concept; in the United States, the FDA requires genetic testing before administering most targeted therapies. In China, it has only recently been incorporated into the medical guidelines issued by the National Health and Family Planning Commission.
For the same disease, we have found that numerous genes may be implicated, rather than a single gene, as seen in polygenic conditions such as cancer. Drug selection requires molecular-level diagnosis and analysis for each patient. Based on the results of this diagnostic analysis, the most appropriate medication is chosen according to the specific genetic variants identified.
For the healthcare industry, the primary goal is to improve patient cure rates or the likelihood of response to initial pharmacotherapy. Furthermore, reducing healthcare costs is of paramount importance. While healthcare reform and high medical expenses are frequently discussed, precision medicine not only extends patient survival but also identifies the most appropriate medications. Its core concept is to administer the right drug to the right patient at the right time.
Precision medication has another critical role, known as “treating different diseases with the same therapy.” For example, Avastin was initially used to treat metastatic colorectal cancer and non-small cell lung cancer. Through treating these conditions, researchers discovered that if other tumors also harbor defects in the same gene, could they be treated with this drug as well? This is the concept of “treating different diseases with the same therapy.”
In the medical and healthcare sectors, what exactly can gene sequencing or genetic testing technologies achieve? First, tumors have a hereditary component; screening for these hereditary genes is highly effective in enabling better prevention and control of diseases in the future. This approach has been implemented in the United States for over ten to twenty years, during which time tumor mortality rates have decreased significantly.
In addition, certain chronic diseases, such as diabetes and hypertension, have genetic components. Genetic screening helps prevent the further progression of these conditions. There are also genes associated with children’s development and growth. For health management, it is quite challenging for technology-driven companies like Huayinkang Gene to drive adoption on their own. The involvement of commercial insurance providers and health examination enterprises is therefore critical.
The most valuable approach is genetic screening. Through genetic screening, individuals can gain insights into their own genetic information and adopt preventive healthcare strategies to enable early detection, early prevention, and early treatment. When we identify certain genetic defects or vulnerabilities, we can take preventive measures by modifying our lifestyle, which is particularly valuable for the early prevention of major diseases.
Another widely utilized sector is medication safety. Due to our limited understanding of genetics and the lack of testing methods in the past, drug-induced fatalities—particularly among children—were highly prevalent. Screening through genetic testing can deliver substantial value in the healthcare field.
Genes are relevant throughout a person’s entire life and are associated with thousands of diseases. I believe that the maturation of genetic technologies and products will provide robust technical means to support the future development of healthcare and the broader health and wellness industry. We often say that technology changes lives, but I believe technology is merely a tool; it is commerce and practical applications that truly transform lives.
Is the wild growth of the gene industry normal? It is normal because it is a product of the market. It is abnormal because, before the market has fully formed, crops and weeds coexist in this fertile soil, with the weeds potentially outgrowing the crops. If this wild growth is not effectively guided and regulated, it will lead to a situation where bad money drives out good, resulting in duplicate investments and resource waste. In particular, speculators may harm this nascent market.
So, how should we address this state of disarray?In fact, industry insiders and the government have taken note of this phenomenon and have begun to take action. The “China Gene Sequencing Technology and Industry Alliance” was established in 2016, and the government has been continuously rolling out industry standards. I am confident that these self-regulatory measures and the introduction of industry standards will put an end to the current chaos. A reshuffling of the gene industry is imminent. I believe that the companies that survive will be those with core technologies, clear positioning, and high-quality services.