Complete Genomics: Financing the Future of Sequencing

Complete Genomics, Inc. (CGI), now a subsidiary of MGI Tech Co., Ltd., carved a niche in the genomics landscape with its innovative DNA sequencing technology and business models. Understanding its financial journey requires examining its early funding, its time as a public company, and its eventual acquisition.

Early Funding and IPO

Like many biotech startups, CGI initially relied on venture capital funding to fuel its research and development. The company attracted significant investment based on the promise of its proprietary DNA sequencing platform, which aimed to offer highly accurate and cost-effective whole-genome sequencing. This early funding allowed CGI to develop its technology and build a prototype system.

In 2010, CGI went public, listing on the NASDAQ. The Initial Public Offering (IPO) raised substantial capital, providing resources for further technology refinement, expansion of its manufacturing capabilities, and the establishment of its own sequencing service business. The IPO was a critical milestone, validating the company’s technology and providing a public market valuation.

Business Model and Revenue Generation

CGI’s business model evolved over time. Initially, the company focused on selling its sequencing systems to research institutions and pharmaceutical companies. However, it later shifted towards offering whole-genome sequencing as a service. This strategic shift required significant capital investment to build and operate large-scale sequencing centers. Revenue was generated from contracts with researchers, pharmaceutical companies, and government agencies needing comprehensive genomic data.

However, CGI faced challenges in achieving profitability. The high cost of developing and maintaining its technology, coupled with the competitive landscape of the sequencing market, put pressure on margins. While the demand for genomic data was increasing, pricing pressures and the need for continuous innovation required careful financial management.

Acquisition by MGI Tech

In 2013, CGI was acquired by BGI-Shenzhen, now MGI Tech Co., Ltd., a leading Chinese genomics company. This acquisition marked a significant turning point. MGI Tech offered CGI financial stability and access to a larger market, particularly in Asia. The acquisition allowed CGI to continue its research and development efforts and integrate its technology into MGI Tech’s broader genomics portfolio.

The financial implications of the acquisition were considerable. MGI Tech gained access to CGI’s intellectual property and its experienced team, while CGI benefited from MGI Tech’s extensive resources and market reach. From a financial perspective, the acquisition transitioned CGI from a publicly traded company subject to quarterly reporting pressures to a subsidiary within a larger, privately held entity, allowing for a longer-term strategic focus.

Legacy and Future

The Complete Genomics story highlights the challenges and opportunities in the genomics industry. The company’s financial journey demonstrates the importance of securing funding, adapting business models, and navigating the competitive landscape. Although no longer an independent publicly traded entity, its contributions to DNA sequencing technology continue to influence the field through MGI Tech, shaping the future of genomics research and applications. The acquisition by MGI Tech ultimately provided a sustainable financial path, ensuring the continued development and commercialization of CGI’s innovative sequencing platform.