NEW YORK – Building on its global expansion plans, Chinese genomics company BGI Genomics established over a dozen new subsidiaries across the globe in 2022, according to the firm’s annual report filed with the Shenzhen Stock Exchange last week.
The new entities span multiple continents and 14 countries, including Uzbekistan, Uruguay, Turkey, Madagascar, Nigeria, Hungary, South Africa, United Arab Emirates, the Dominican Republic, Chile, Malaysia, Angola, Kazakhstan, and Serbia. BGI characterized most of these subsidiaries, which contain "BGI Health" in their names, as "professional scientific and technical services" companies.
Additionally, outside of mainland China, BGI created Smarter Info Company and BGI Bioscience Hong Kong Company in Hong Kong, both with HKD 10 million in registered capital. BGI also dissolved its wholly owned Canadian subsidiary, BGI Genomics Canada, in October 2022.
While the details of BGI’s nascent oversea entities are still largely lacking — and BGI did not respond to GenomeWeb’s request for comment — the company has made its goal for global expansion clear in the annual report.
"In the past three years, BGI Genomics has expanded its Huo-Yan laboratory to over 30 countries across the world, making active contributions to global public health," the firm noted. "The company has been working hard to promote Chinese technology, Chinese experience, and Chinese standards to go global."
Established to combat the COVID-19 pandemic, the Huo-Yan (which translates to "fire eye" in Chinese, attributed to the Chinese idiom for the ability to identify targets fast) laboratories were initially set up for high-throughput SARS-CoV-2 detection using BGI’s laboratory technical solutions.
By the end of 2022, BGI said it had launched more than 100 Huo-Yan labs across the globe in more than 30 countries and regions. Its related testing products have become available in over 180 countries and regions worldwide.
As the pandemic winds down and the market environment shifts, BGI noted, the company has explored pivoting the Huo-Yan laboratories overseas toward routine clinical applications such as prenatal, oncology, and infectious disease testing, as well as large-scale population genomics and screening tests.
To that end, BGI said it is foraging partnerships with foreign governments, international companies, foundations, and NGOs to help pave the path for its global growth. In July 2022, BGI’s subsidiary in Saudi Arabia, BGI Almanahil Health for Medical Services, established a joint venture with Arabian International Healthcare Holding to form and operate the Saudi Advanced Medical Lab, which provides clinical laboratory testing and bioinformatics services in Saudi Arabia.
Additionally, the company said it is prompting technology localization by transferring its technology to local partners. By the end of 2022, BGI has completed 15 technology transfer programs in 11 countries.
During 2022, BGI said it secured more than 220 registration approvals from China's National Medical Products Administration. The company’s products also garnered 293 regulatory approvals overseas, including in the US, Japan, Australia, Canada, and the UAE. The company also obtained 17 CE marks under Europe's new In Vitro Diagnostic Regulation (IVDR).
BGI acknowledged some of the risks of doing business overseas to investors. BGI Write, a Beijing-based BGI subsidiary for synthetic and molecular biology, for instance, was added by the US Bureau of Industry and Security (BIS), an agency of the US Department of Commerce, to the so-called Entity List under Export Administration Regulations (EAR) in 2020, subjecting the company to specific license requirements for the export of specified items out of the country.
In March 2023, another BGI subsidiary, BGI Tech Solutions Hong Kong, was also added to the Entity List by BIS. The Entity List designation would mean that these companies may not procure certain restricted items, relaying a possible risk for their businesses, BGI noted.
2022 financials
For full-year 2022, BGI Genomics booked RMB 7.05 billion ($1.02 billion) in total revenues, a 4 percent increase from RMB 6.77 billion in 2021.
The firm’s net profit attributable to shareholders was RMB 802.9 million, down 45 percent from RMB 1.46 billion in the year-ago period. Earnings per share for 2022 were RMB 1.96, a decrease from RMB 3.56 in 2021.
Looking at BGI's top product sectors, revenue for precision medicine testing solutions, which accounted for 36 percent of the company's total revenues in 2022, were RMB 2.50 billion, down 26 percent year over year from RMB 3.38 billion a year ago. Infectious disease research and clinical services revenues were RMB 2.30 billion, making up 33 percent of the company’s total revenue and almost doubling from 2021's RMB 1.16 billion. Reproductive research and clinical services revenues, which accounted for 16 percent of the total revenue, were RMB 1.12 billion, representing a 6 percent decline year over year from 2021’s RMB 1.19 billion. Oncology services booked 6 percent of the total revenue in 2022, totaling RMB 403.5 million, growing 6 percent from RMB 379.8 million in the prior year.
By geographic regions, BGI's revenue from mainland China was RMB 3.62 billion, a 26 percent increase compared to RMB 2.88 billion in 2021. Asia-Pacific revenue outside of mainland China, which includes Hong Kong, Macao, and Taiwan, grew 11 percent to RMB 2.79 billion from RMB 2.51 billion in 2021. Revenues from Europe and Africa were RMB 388.5 million, down 59 percent from RMB 938.8 million in the prior year. Revenues from the Americas declined 43 percent year over year to RMB 244.7 million from RMB 432.1 million.
BGI’s SG&A costs in 2022 were RMB 1.99 billion, up 23 percent from RMB 1.62 billion in 2021. The firm's 2022 R&D expense was RMB 535.8 million, up 10 percent year over year from RMB 487.1 million.
The company ended the year with RMB 5.13 billion in cash and cash equivalents.
In 2023, BGI said it will continue to leverage the platform and capabilities established by the Huo-Yan laboratories, adapting to the changing market environment and boosting its testing capabilities in the areas of reproductive health and oncology, as well as infectious and chronic diseases.
In Wednesday trading on Shenzhen Stock Exchange, BGI Genomics' shares were down 3 percent at RMB 70.35.