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BGI Group Addresses Accusations in Proposed US Biosecure Act

This story has been updated to include additional comments from BGI Group about Huo-Yan laboratories and COVID testing. 

NEW YORK – BGI Group said on Tuesday that the Biosecure Act, recently introduced to Congress by the House Select Committee on the Strategic Competition between the United States and the Chinese Communist Party, contains "numerous false allegations" against the company and will "limit competition" in the field of human genome sequencing.

Sponsored by a handful of representatives last week, the bill, if enacted, would prevent federally funded medical providers from using products manufactured or services provided by so-called "foreign adversary biotech companies of concern," including BGI Group, MGI Tech, and MGI subsidiary Complete Genomics, along with WuXi AppTec, which the bill said is affiliated with China’s People’s Liberation Army.

"Unfortunately, this legislation will succeed only in driving BGI out of the US and will not accomplish its stated goal," protecting Americans' personal data, BGI Group said in a statement. "Rather, the bill will further strengthen the effective market monopoly held by one company that controls more than 90 percent of the market, resulting in increased healthcare costs and limited access to technologies and services."

BGI Group did not name the company, but industry insiders agree the remarks refer to Illumina, which still holds a large percentage of the DNA sequencing market, although several new competitors recently entered the market.

Aiming to refute what it called the "falsehoods and baseless allegations" in the bill, BGI Group insisted that the company is privately owned, not controlled by the Chinese government or military, and that its work is undertaken for civilian and scientific purposes only.

In an email, a company spokesperson explained that BGI Group is the unofficial name for BGI Shenzhen, which is the holding company of BGI Genomics, a diagnostics and research service company trading on the Shenzhen Stock Exchange. Though technically not its official name, BGI Shenzhen goes by BGI Group in much of its official communication.

According to BGI Genomics’ 2022 annual financial report, BGI Shenzhen was the largest shareholder of the company, owning 35.94 percent of the firm’s total shares. Meanwhile, BGI Shenzhen was largely owned by Jian Wang, its cofounder and chairman, who holds 85.3 percent of its shares.

MGI Tech, which manufactures sequencing instrumentation and is traded on the Shanghai Stock Exchange, "is not part of, or controlled by" BGI Group, the firm claimed. "BGI [Group] and MGI do not hold each other’s shares, and they have separate boards and governance bodies," BGI Group said in its statement.

While this statement appears to be accurate, there is still significant overlap between the two companies in terms of ownership and control. For example, Wang serves as the chairman of BGI Group and its subsidiary BGI Genomics, as well as MGI Tech.

Also, according to MGI Tech’s 2023 H1 financial report, MGI Tech's largest shareholder, Shenzhen Huada Technology Holding Group, which is 100 percent owned by Wang, controls 36.81 percent of the company's shares.

MGI Tech's second-largest shareholder, Tibet Huazhan Venture Capital, holds 9.97 percent of its shares, and Wang’s Shenzhen Huada Technology Holding Group controls 99 percent of the shares of Tibet Huazhan Venture Capital.

In addition, MGI Tech’s 2022 annual report indicated that over half a dozen members of its senior leadership team or board had served in or continued to hold key management positions at BGI Group at that time.

As of this week, BGI Group's Chinese and English language websites also still listed MGI Tech on its "About" page, along with a long list of other affiliates, including BGI Genomics, BGI-Research, the China National GeneBank (CNGB), and the open-access journal GigaScience.

In the proposed bill, lawmakers accused BGI Genomics of collecting genetic data from "millions of pregnant women through prenatal tests" and alleged that the company "reportedly has worked with the People's Liberation Army to improve ‘population quality’ in the People's Republic of China."

In response, BGI Group said the firm does not serve patients or provide clinical services, including prenatal testing, in the US and therefore has no access to personal genomic data from American patients. In countries where BGI Genomics provides prenatal testing, the company "compl[ies] with all applicable laws and regulations and meet[s] stringent data protection standards," BGI Group said.

In the US, BGI Genomics only serves institutional and corporate clients for research purposes through its US subsidiary, BGI Americas, the BGI Group spokesperson said. "Any personally identifiable information from human samples is removed by the client before the samples are sent to BGI [Genomics], and these samples are sequenced in North America and Europe," BGI Group noted in its statement.

According to BGI Genomics' 2022 annual report, the firm has two subsidiaries in the US: BGI Americas and GBI Diagnostic. However, the spokesperson said GBI Diagnostic "does not serve patients in the US, nor does it provide clinical services."

BGI Group also denied the allegation that the company helps the Chinese government collect DNA data through CNGB. The company said CNGB is operated by BGI-Research, a nonprofit research institute funded by BGI Group under contract from the government. CNGB stores research data for peer reviews, similar to the function of gene banks in other countries, including the US, the company argued, adding that BGI Genomics’ testing data is stored by the company, not CNGB.

Moreover, BGI Group said that the allegation that BGI Genomics collects human DNA through its Huo-Yan (Fire Eye) laboratories, which were launched in response to the COVID-19 pandemic to assist with large-scale PCR testing, is "false and unscientific." For COVID testing, BGI Genomics "only analyzes non-human data by checking for the presence or absence of the virus," the company noted. It also states that all Huo-Yan laboratories’ COVID-19 related samples "are destroyed after testing in accordance with local regulations or the requirements from Ministry of Health." 

Furthermore, according to BGI Group, assertions that the company has participated in the collection, storage, or analysis of personal genetic information in order to infringe on human rights "are false," and it denied that BGI Group has supported the surveillance of minorities.

"The genomic sequencing market is a global one," BGI Group stated. "US companies that operate in China, including subsidiaries of the monopolist that stands to benefit from this legislation, are subject to Chinese law, just as Chinese companies that invest and operate in the US comply with US laws."