Starting in 2014 the Chinese government has begun to regulate the NGS (Next Generation Sequencing) market for clinical applications as NGS technology is increasingly adopted, especially for NIPT (Non-Invasive Prenatal Test) and cancer diagnosis and treatment. This market and there are many facets that can be discussed; SmithStreet would like to share the following 3 points:
1. ICLs (Independent Commercial Labs) are leading NGS technology and keep growing
SmithStreet created an updated list of China’s ICLs at the end of 2017. The number of new ICLs has grown substantially from 2016 to 2017 with more individual labs focusing on gene sequencing technologies, yet an integration is already seen in the ICL market and large ICL chains will expand their dominance.
Exhibit 1: There are more than 1,000 ICLs in China and ~50% of them are located in Beijing, Shanghai and eastern coastal provinces – Guangdong, Jiangsu, Zhejiang, Shandong
Exhibit 2: ICL market has been booming since 2015 and more newly established ICLs are focused on “Precision Medicine”