Gene Science Firm Stops Trading to Investigate Meteoric Stock Rise

Shares of China’s largest genomics firm BGI Genomics Co. were, as of Wednesday, worth 17 times more than when it listed in Shenzhen just four months ago, triggering concerns over potential risks behind the investment craze.

BGI has since Thursday halted trading and said it is investigating the price surge. Since listing in Shenzhen, the company has emerged as the second-most valuable company listed in the Chinese mainland, with a market value of more than 1 trillion yuan ($150 billion).

Established in 1999, BGI is seen by investors as a pioneer in the field of genomics — the study of organisms’ genes — in China and has raised funds from many renowned investors, including Morgan Stanley and SoftBank Group Corp.

However, it still lags behind some of its overseas genomics peers in terms of technology, while many domestic startups which started later are catching up.

So far, the only commercialized BGI product is noninvasive prenatal testing, which accounted for nearly 60% of revenue in the first half of the year. All the company’s other technologies, such as cancer genome sequencing, are still in the early stages of development.

It previously enjoyed a price advantage over major foreign rival Illumina Inc., as the Chinese firm’s BGISEQ-500 sequencing platform costs only $600 for each test, half of the price of using Illumina’s HiSeq X platform. However, Illumina in January launched a new NovaSeq series that has helped to cut its price to only $100 per test.

Domestic genomic startups, including Berry Genomics Corp. and Daan Gene Co. Ltd., have all chosen foreign giants such as Illumina and Life Technologies Corp. as their genomic device suppliers.

Contact reporter Coco Feng (renkefeng@caixin.com)