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Congress Introduces Bill to Prevent Medical Providers From Using BGI, MGI and Affiliates' Products

This story was updated on Monday, Jan. 29 to clarify MGI Tech's and BGI Genomics' relationship with BGI Group and to include MGI's statement to investors. 

NEW YORK – The House Select Committee on the Strategic Competition between the United States and the Chinese Communist Party said on Thursday that it has introduced a new bill to ban the use of federal funding on "foreign adversary biotech companies," including China's BGI Group.

Named the Biosecure Act, the bill was sponsored by Rep. Mike Gallagher, R-Wis., the committee chairman, and Rep. Raja Krishnamoorthi, D-Ill., and co-led in the House by Reps. Neal Dunn, R-Fla., Seth Moulton, D-Mass., and Jake Auchincloss, D-Mass. It aims to "ensure foreign adversary biotech companies of US national security concern do not gain access to US taxpayer dollars," according to a statement from the House Select Committee on the Strategic Competition between the United States and the Chinese Communist Party.

If enacted, the legislation would ban federally funded medical providers from using products manufactured or services provided by the so-called "foreign adversary biotech companies of concern," including BGI Group, its affiliate MGI Tech, and MGI subsidiary Complete Genomics, along with WuXi AppTec, which it said is affiliated with China’s People’s Liberation Army.

Sens. Gary Peters, D-Mich., who chairs the Homeland Security and Governmental Affairs Committee, Bill Hagerty, R-Tenn., Mitt Romney, R-Utah, and Roger Marshall, R-Kan., also introduced corresponding legislation in the Senate.

"BGI Group fully supports protecting personal data, but the legislation which will effectively drive BGI from the US market will not accomplish this goal and rather will restrict competition, raise healthcare costs, and limit access to technologies," a BGI spokesperson wrote in an email. "In the US, BGI does not operate clinical laboratories or collect patient samples and has no access to personal or genetic data. Our company serves only institutional and corporate clients for research purposes in areas such as cancer and medical treatment, and we follow all the data protection rules and regulations."

Additionally, the spokesperson said that BGI Group is privately owned and "none of BGI is in any way controlled by or linked to the Chinese government or the military."

"Complete Genomics does not belong in this legislation as it is a US-based instrument manufacturer, does not collect or have access to genetic patient data, and complies with all applicable data privacy laws," a spokesperson for Complete Genomics, a subsidiary of MGI Tech, which is part of BGI Group, said in an email.

Saying the "legislation stems from one powerful US player's effort to eliminate competition," the spokesperson noted that "the push for anticompetitive market power over genomic sequencing devices will drive up costs for important new health technologies while hindering researchers from making breakthroughs in cancer, Alzheimer's, and other diseases."

The spokesperson, however, did not name the "one powerful US player" to which they were referring.

BGI Genomics, part of the BGI Group, was added to a blacklist of "Chinese military companies operating directly or indirectly in the United States" by the US Department of Defense in 2022 along with 12 other companies. The executive order "allows the United States to prohibit — in a targeted and scoped manner — US investments in Chinese companies that undermine the security or democratic values of the United States and our allies," the White House said in a statement at the time.

BGI Group's next-generation sequencer instrumentation business affiliate, MGI Tech, returned to the US market in January 2023 after BGI ended years of legal battles in the US with Illumina. MGI has been doing business in the US through its San Jose, California-based US subsidiary, Complete Genomics, which BGI Group acquired in 2013 after clearing multiple regulatory hurdles.

According to MGI Tech's 2023 1H financial report, MGI Tech's largest shareholder, Shenzhen BGI Technology Holdings Group, controls 36.81 percent of the company's shares. That company is controlled by Jian Wang, a founder of the BGI Group, according to the filing. 

MGI Tech's second-largest shareholder, Tibet Huazhan Venture Capital, has 9.97 percent of its shares. Jian Wang also controls this company. 

According to BGI Genomics' 2023 1H financial report, BGI Genomics' largest shareholder is a holding company called Shenzhen BGI Genomics Technology, or BGI Holdings in short, which has 35.94 percent of BGI Genomics' shares. This company is also controlled by Jian Wang. 

Jian Wang also serves as the chairman for both MGI Tech and BGI Genomics.

By market close on Friday, BGI Genomics' stock was down 3 percent at RMB 41.49 ($5.85) on the Shenzhen Stock Exchange. MGI Tech's stock was down 5 percent on the Shanghai Stock Exchange at RMB 76.80.

In a subsequent statement to investors filed by MGI Tech in the Shanghai Stock Exchange on Jan. 29, MGI noted that the accusation against the company in the proposed bill contains "many factual errors" and "it remains largely uncertain if the bill will be passed and enacted."