Chinese Genomics Company Buys Sequencing Startup

Advanced DNA sequencing company Complete Genomics, based in Mountain View, California, says it has agreed to be acquired by BGI-Shenzhen (formerly the Beijing Genomics Institute) for the fire-sale price of $117 million. That is far less than the $250 million the company has already spent developing faster, more accurate ways to decode DNA.

For BGI, which now claims to be the largest genomics company in the world, the purchase is a chance to acquire advanced technology that will help expand its research and commercial efforts in clinical genomic sequencing. BGI has sequenced the genomes of organisms ranging from the SARS virus to the giant panda, and the company also offers commercial services in clinical and agricultural DNA analysis.

Though a 2011 paper published in Nature Biotechnology found that Complete Genomics produced more accurate DNA data than competitors, superior accuracy never translated into financial success. “The market doesn’t necessarily reward the best technology right away,” says George Church, a geneticist at Harvard Medical School who serves on the scientific advisory boards of both Complete Genomics and BGI.

Business missteps may have been the company’s downfall. Back in 2008, it made news by declaring that it would sequence anyone’s genome for just $5,000 (see “Five Thousand Bucks for Your Genome”). That helped set off a round of price cuts among genomics firms such as its competitor Illumina, which at the time was charging $50,000 to decode a human genome. Illumina was able to lower its prices faster than expected. “They took on a battle that they couldn’t win,” says David Barker, the former chief scientific officer of Illumina and now a board member of the Wellcome Trust. “Illumina felt it was responding to a price war.”

Both companies currently offer to sequence complete genomes for around $4,000—an incredibly low price considering that the first human genome was sequenced only some 10 years ago at a cost well over $1 billion (see “Sequencing Price Drops Even Lower”).

The falling price of DNA data has been a boon for academic scientists, who can now tap into fast and affordable sequencing for research studies. As prices decline further, doctors and consumers are expected to begin purchasing whole-genome information regularly as well.

BGI currently sequences genomes using Illumina’s machines, among others. By acquiring Complete Genomics, Church says, the Chinese company will gain access to next-generation technologies still in development: the company will “not just [be] a technology importer but actually … have, as part of their corporate DNA, the development of new generations of technology.”

Antonio Regalado contributed reporting to this item.