Financial Services Association, September 9 (Reporter Lu Afeng) On the 9th, Huada Group officially released Huada Xufeng CycloneSeq sequencing technology, and released two new nanopore sequencers CycloneSeq-WT02 (hereinafter referred to as “WT02”) and CycloneSeq-wy01 (hereinafter referred to as “WY01”). Huada Group has become the only sequencer organization with three different technology paths in the world, or triggering a new round of competition for basic equipment in the genetic sequencing industry.

According to reports, Huada Group has granted global distribution rights for the two new gene sequencers announced this time to Huada Intelligent Manufacturing (688114.SH), and Huada Gene (300676.SZ) will also closely promote the application of these products. Combined with the current decline in the performance of Huada Intelligent Manufacturing and BGI, whether new technology and new products can become performance boosters has attracted attention from the industry.

Jiang Hui, chief operating officer of Huada Zhizao, told the Finance Association reporter in an interview that after obtaining the distribution rights, Huada Zhizao has sold more than 50 WT02 units to foreign countries, and several devices have already won the bid in the tender.

Fourth-generation technology and sequencers released, and the business format of the genetic sequencing industry is being upgraded

On the 9th, at the Huada Group Life Science Global Product Launch Conference, Huada Group unveiled two Huada Xufeng CycloneSeq series sequencers — WT02 and WY01.

According to Xu Xun, director of the Huada Life Sciences Research Institute and executive director of Huada Group, the WT02 is a medium throughput nanopore gene sequencer. It is compact and portable, uses a dual-chip architecture, supports independent operation, and has flexible throughput options.

The WY01 is a high-throughput nanopore sequencer equipped with a high-throughput high-density chip. It not only has properties such as ultra-long reading length and long-lasting continuous testing, but can also fully cover complex genomic sequences. It can be applied to application scenarios with higher data throughput requirements, such as large genomes, human genome re-sequencing, full-length transcriptome sequencing, and epigenetic testing.

According to reports, WT02 will be available for ordering from now on, and WY01 is scheduled to be launched in the first half of 2025.

According to a previous article by Hao Weilin of the Medical Device Technology Evaluation Center of the State Drug Administration, nanopore sequencing technology is a technology based on electrical signal sequencing. Compared with other sequencing techniques, nanopore sequencing technology is extremely simple to process, requiring no DNA polymerase or ligase, or dNTPs (deoxynucleoside triphosphate). The sequencing process contains 4 key substances: nanoporous proteins, polymeric films, motor proteins, and connecting arms.

“As a new type of sequencing technology, nanopore sequencing has different characteristics in many aspects such as cost, sequencing speed, sequencing reading length, and accuracy, and has significant advantages over other sequencing methods.” Dong Yuliang, general manager of Huada Xufeng, said in an interview. “Our patent layout is currently quite comprehensive on a global scale, and we have deployed more than 200 patents.”

Research competition for fourth-generation gene sequencing is also in full swing. According to Yao Rongyun, as of today, there are a total of 118 domestic “nanopore sequencing” related patents (including those currently being processed), including 77 invention applications, 38 authorized inventions, and 3 utility models.

In addition, according to media reports, Wanfu Biology (300482.SZ), one of the leading IVD companies, announced plans to invest in Beijing Puyi Biotechnology Co., Ltd. in March 2023, which focuses on the development of nanopore sequencing technology; Qi Tan Technology released the first domestic nanopore gene sequencer “qNOME-9604” in 2020; the fourth-generation domestic gene sequencing technology “Unicorn” An Sequencer (AXP100-RS) released the fourth-generation high-throughput nanopore gene sequencer () in May 2023.

A key magic weapon to reverse the decline in Huada's performance?

According to public information, the global market for nanopore sequencing is expected to reach 0.68 billion US dollars in 2030, and China's market size will reach 19.383 million US dollars in 2030. A CIFA reporter learned that as pioneers in nanopore gene sequencing, the two leading overseas companies ONT (Oxford Nanopore) and 10X Genomics have already made a lot of money.

ONT, the global leader in nanopore sequencing, has shown a steady trend of rapid growth year by year since 2016, growing from £0.0045 billion in 2016 to £0.1697 billion in 2023, with a compound annual growth rate of 67.96%.

As a leader in single-cell sequencing, 10X Genomics achieved rapid revenue growth through the single-cell sequencing “instrument+consumables+software” product portfolio before 2022, rapidly growing from $71.085 million in 2017 to $0.516 billion in 2022, but the growth rate slowed markedly in 2021-2022.

In June of this year, Huada Zhizao issued an announcement. The company reached a cooperation with organizations under the Huada Research Institute to obtain global distribution rights for products such as space-time machines and nanopore sequencers. Also, according to BGI sources to the Financial Federation reporter, CycloneSeq sequencing technology and fourth-generation sequencers will be implemented and applied in future business.

However, looking back at the 2024H1 performance of the two major listed companies, Huada Intelligent Manufacturing and Huada Gene are both under pressure to varying degrees.

In 2024H1, Huada Intelligent Manufacturing achieved negative net profit and deducted non-net profit. Losses increased by 204.23% and 139.27%, respectively, over the same period last year.

Will new technology changes and the nanopore sequencer WT02 bring new additions to Huada System? Has an order been placed yet?

Jiang Hui, chief operating officer of Huada Intelligent Manufacturing, told the Financial Federation reporter, “Since obtaining global distribution rights in June, (We) have been promoting external use, including early test use. Currently, the number of installed users is close to 50-60 units. At the same time, we have now won the bid for 4 instruments and equipment through public tenders. Customers include universities, research institutes, and customer representatives from disease control and hospitals, such as the Shanghai Center for Disease Control and Prevention and the Fourth Institute of Oceanography of the Ministry of Natural Resources.”

Jiang Hui did not give a specific forecast on the positive impact on performance, but she said that in terms of future sales strategies, the promotion and sales of CycloneSeq to the front end will be accelerated based on the sales channels already established, including the four types of customers we have now, which is actually our future business direction.

At the press conference on the morning of the 9th, Xu Xun also announced the sale price of the WT02. The sale price of the WT02 sequencer (including server) is 0.4 million yuan, and the supporting kit is 5100 yuan/run. If you order within one week after the press conference, you can get the WT02 sequencer (including server) at a price of 0.1999 million yuan.