BALTIMORE – While most applications of its Saphyr optical genome mapping system in the US are focused on research discovery, Bionano Genomics has been making inroads in China with the goal of marketing Saphyr as a clinical diagnostics platform.
Over the past year and a half, the San Diego-based genomic analysis company assembled a team of local staff in China and is actively forging collaborations with Chinese clinicians and hospitals to gain recognition of the company's technology and endorsement for clinical approval.
The company's China initiative is also evidenced by its inaugural China Symposium last month. The one-day virtual symposium, held exclusively in Chinese and featuring speakers from top Chinese biomedical institutions such as Peking Union Medical College Hospital and the Chinese University of Hong Kong, highlighted the latest adoption of Bionano's optical genome mapping technology for translational research in areas such as reproductive health, hematological disorders, and solid tumors.
Although Bionano has always pursued a multinational commercial strategy, the China Symposium marked the company's first event exclusively for Chinese researchers, said Bionano President and CEO Erik Holmlin, kicking off the event.
Calling the event "well attended and received" with approximately 300 registrants and about 6,000 online visits, Holmlin, in an interview after the symposium, said the China Symposium is a satellite meeting to Bionano's 2022 Symposium, which was virtually held over the course of four days in January.
Although many Bionano Chinese customers also participated in the main symposium, the time difference was not ideal, Holmlin said, adding that the dedicated China Symposium "shows that we embrace the China market, and that the China market can embrace us."
Holmlin noted that Bionano launched its inaugural platform in the early 2010s simultaneously in US and China. Likewise, when Bionano launched its Saphyr system in 2017, some of the very first customers were in China and in Europe, Holmlin added. He noted that the company's 2021 geographical revenue breakdown included approximately 50 percent of revenues from North America, 30 percent from Europe, the Middle East, and Africa, and 20 percent from Asia-Pacific.
Within APAC, Holmlin said China is the biggest market, and it is also the biggest single-country revenue driver for Bionano after the US. However, Holmlin pointed out that while most adoption of the Bionano platform in the US is for pure research discovery, in China it is geared more toward potential clinical applications with two major focuses: reproductive health and hematological malignancies.
To disseminate the instruments in mainland China, Bionano has contracted Chinese distributors including Star Research Technology and Ultravision Technology. The company also hired a team of Chinese employees to "create an awareness of Bionano and understanding of where our products fit into the genomic landscape and what their value propositions are," Holmlin said.
Bionano's China division is headed by Li Yu, who joined the team almost two years ago with previous experience working with Becton Dickinson's Bioscience business and Thermo Fisher Scientific in China. In an interview after the symposium, Yu said her team now has 11 employees, including three regional business development managers individually located in Beijing, Guangzhou, and Shanghai; two field application scientists located in Shanghai and Beijing; one engineer located in Beijing; and one senior scientific affairs manager located in Shanghai. The rest of the team consists of employees from BioDiscovery, a bioinformatics company that was acquired by Bionano last year and has local staffing in the Chinese western city of Chengdu.
The team currently does not have a physical office, Yu said, adding that the locations of the team members are aligned with the company's strategic plans to do business in top-tier metropolitan areas with many biomedical institutions and research hospitals. Due to the relatively small team size, Yu said her team has to rely on its Chinese distribution partner for product sales.
Although Yu said her team is still "trying to figure out what type of customer is our target," she said independent clinical labs are currently Bionano's biggest clientele in China. However, Yu said one ultimate goal for Bionano in China is to obtain clinical authorization for its Saphyr system and enter the clinical diagnostic space. Therefore, the team is also forging relationships with clinicians within the Chinese hospital systems.
However, Bionano's entry into China's clinical market has many barriers. For one, "as an international company, we can't directly do business with China hospital customers," Yu said, adding that, in general, public hospitals in China, which are mostly owned by the government, are restricted from processing transactions directly with a foreign company. Therefore, Yu pointed out that this is another reason for Bionano to work with Chinese distributors.
Perhaps the biggest obstacle for Bionano is obtaining approval for clinical use from China's National Medical Products Administration (NMPA), the Chinese equivalent of the US Food and Drug Administration. Based on Chinese policy, an imported US medical device needs to obtain FDA clearance for clinical use first in order to be considered by NMPA for clinical approval, Yu said. But because the Saphyr system is not approved by the FDA for clinical use, she said, the platform cannot obtain an in vitro diagnostics label from NMPA directly.
According to Holmlin, Bionano is currently considering an OEM agreement with a Chinese local manufacturer to domesticate the platform. In that case, Yu said the company would transfer the technology associated with the platform to its Chinese counterpart and become merely the raw material supplier for the instruments, which will be completely manufactured in China.
Even so, Yu pointed out that in order to demonstrate the clinical utility of Bionano's platform, which is currently designated for research use, Chinese policies require the instrument to be tested and validated through laboratory-developed tests (LDT) in pre-clinical studies.
To achieve that, Yu said her team has already hammered out a collaboration with Peking Union Hospital to test the platform in prenatal samples. She also said the team is working to recruit Xinhua Hospital in Shanghai to test the platform in pediatric studies and the Obstetrics and Gynecology Hospital at Fudan University (Red House Hospital) to conduct LDTs on prenatal cases. "Every step we [take] here is to promote our product truly step into the clinic market," said Yu, adding that she anticipates the LDT validation projects will complete within a year.
In terms of competition, Yu said she does not see Bionano having any rivals in the sense of technology in China since it is the only company providing optical genome mapping solutions to her knowledge. However, when it comes to cytogenetic research, she said Bionano faces competition from other existing techniques such as karyotyping, FISH, copy number variation sequencing, and chromosomal microarray analysis.
Before Bionano started to clearly target the Chinese clinical market last year, Yu said, it had sold over 30 platforms in China, mostly to basic science researchers. Since then, the company has sold nearly 10 platforms. The company has installed 164 systems worldwide, according to Holmlin.
Despite signs of success, Bionano's business in China, like many other international companies, also experienced ups and downs, fluctuating with the international environment and China's evolving policies.
"During the time that we've been doing business in China, a lot of policies have changed and evolved," said Holmlin, alluding to a "volatile" Sino-US relationship over the last half-decade. He also said he has noticed a shift in China's embracement of foreign innovations, which was strong in the early 2010s. "I still see that there's a strong desire to bring that innovation in," he said. "But it's often met with a national initiative around competing."
Most importantly, he noted, China's financial policy has also shifted, clamping down on the money flow to support foreign initiatives. He said Bionano has been backed by Chinese investments since its inception, but starting in 2016 this financial support dried up because China's capital outflow policies had changed.
Moreover, Holmlin said that China also codified "a tremendous number of heavy restrictions around the analysis of Chinese people's genomes." And such laws, which mean it is illegal for foreign companies to analyze Chinese people's genomes, make it "tricky" to work with Chinese samples for genetic data analysis and publishing, he said. "As a foreign company, we respect those laws," Holmlin said. "And we need to operate within those constraints, which means that we don't do any analysis of Chinese samples."
Moving forward, Bionano definitely plans to expand its China team, according to Yu. "I think the first target is we build up the team, we lay a solid foundation here, and we set up the several milestones we want to achieve in the following years," Yu said. "Every business needs to be cultivated step by step to grow up."