Nuo Wo Source Application Termination IPO Review Gene Detection Industry Bubble Looming

Due to the impact of the new crown pneumonia epidemic, nucleic acid detection has become a high heat term. Many genes have been known to Chinese genes, Berry genes and pan genes. Under this high fever, the news of a genetic company Noho's application for ending the IPO review has attracted much attention.

Recently, the name of Nuo source has appeared in the column of the latest application of the SFC's termination of the review. This means that the securities company has been waiting for no results for nearly 100 days after the SFC canceled its issuance documents, and the company temporarily missed the A share market.

For Nuo Wo source IPO stop, the industry speculated that this has a great relationship with its business structure and epidemic impact, and the layoffs after being exposed are directly affected by the epidemic. And Nuohe's source of IPO stopped, and let the outside world speculate that the bubbly gene detection industry bubble emerges.

A long-term concern about genetic testing industry insiders said that Nuo source is a subdivision of the unicorn, the application for termination of the IPO review for many reasons, and in the industry, the gene company's business has a certain degree of continuity, affected by the epidemic limited.

In March 17th, Gao Yang, chairman of Berry gene, said in an interview with the twenty-first Century economic report reporter that the IPO stop of Nuohe source may be affected by many factors, and it may not rule out the possibility of its re listing in the future. In the epidemic, genetic testing is bustling, but many enterprises are responsible for corporate social responsibility. The gross margin level of service testing is not as good as that of masks, and the epidemic has a great impact on small and micro enterprises. From a market perspective, clearing some relatively backward production capacity also lays a foundation for the future development of the industry.

In fact, genetic testing companies also play an important role in the epidemic, providing nucleic acid detection, sequencing and other services. Gan Jun system

IPO collapse

The prospectus disclosed that the main business of Nuo's source is scientific and technological services, that is, providing research services for scientific research institutions, universities, medical institutions, pharmaceutical enterprises and other enterprises and institutions, such as genetic testing and bioinformatics analysis, etc., and is subdivided into three parts: life science basic research services, medical research and technology services, and database sequencing services.

According to another information, Nuo Wo completed two rounds of financing before applying for IPO listing, namely, the 200 million yuan A round of financing in July 2015, and the 500 million yuan B round of financing in November 2016. In the industry analysis, Nuo Wo source IPO or to raise funds to ease capital pressure.

In July 2016, he completed the shareholding system reform and completed the listing guidance in 2018, 7-10. In December 21, 2018, Nuo Zhi Yuan released the IPO and listed the prospectus on the gem. In November 3, 2019, Nuo he source updated the prospectus.

But in the evening of November 27, 2019, the SFC announced that in view of the need for further verification of the relevant issues of Nuo he source, it was decided to cancel the examination of its issuance declaration documents.

About 100 days later, the SFC sent the latest news to terminate the application of Noho's source IPO.

There is a view that the termination of IPO application by Nuo Wo is closely related to its homogeneous competition in the genetic testing industry, the low threshold of scientific and technological service business, the thin profit, and the dependence of the Nuo source on the upstream suppliers.

The prospectus shows that the gross profit margin of the Nuo source has dropped from 48% in 2016 to 37.52% in the first half of 2019, and the downward trend is very obvious. Among them, the gross profit margin of life science basic research services, which accounted for nearly half of the revenue generated by Nuo he, dropped from 58.14% in 2016 to 46.25%; the gross profit margin of the database building and sequencing platform dropped from 37.53% to 25.34%; the consolidated gross profit margin also dropped from 48% in 2016 to 37.51% in the first half of 2019.

The industry insiders told the twenty-first Century economic analysis reporter that with the development of the whole industry, the current genetic testing industry is generally in the channel of gross profit decreasing gradually, and the trend of homogenization is also obvious.

"Compared with a few years ago, it is more difficult for start-ups to do science and technology service business. Because with the early stage of the enterprise to achieve a certain degree, once the backstage is established, such as sequencing, throughput capacity building, the establishment of the whole laboratory team, such as hardware, software and process of bioinformatics analysis, it will inevitably lead to the market share being concentrated on the head enterprises. The analysts said.

However, the above analysts disagreed with the market rumors that the new crown pneumonia epidemic had great impact on the main business technology services of Nuohe source, which indicated that the scientific services business of the gene testing industry had a certain continuity, and the short-term impact of the epidemic was not great. "Nuo" is more of a design scheme for scientific research institutions and so on, rather than making simple tests for individuals. Cooperation is not a short-term contract either.

In twenty-first Century, according to the information reported by the business reporter, Nuo Wo's clients include the Chinese Academy of Medical Sciences, the Chinese Academy of Sciences, Sichuan University, Chinese Academy of Agricultural Sciences and so on. Among them, the Chinese Academy of Sciences and Chinese Academy of Agricultural Sciences have been working together for many years.

However, as the main source of income of Nuo Wo's source of scientific research services, although the main payment side comes from the government is relatively stable, but at the same time, because of the government's funding trends affected by industrial policies, there is a certain uncertainty. Relatively speaking, the clinical business of medical institutions is relatively stable, with security reserves and the future expectations that can be calculated. So Nuo source is also committed to opening up the medical institutions market, but influenced by its business structure, the effect is not yet apparent.

"Advertising effect"

The staff of Nuo Zhi Yuan did not respond positively to the twenty-first Century economic report, but said that it had resumed work and all operations were carried out normally. As for the reasons for ending the application of IPO, there is no explanation for the source of Nohe.

In the view of Gao Yang, the termination of IPO application may have many factors, such as some rigid requirements of the SFC, the stage of company development and so on.

However, the termination of IPO's application by Nuo wo has caused many speculation in the industry. Some even believe that this is actually a signal for the risk and bubble of the genetic testing industry, especially during the outbreak of the new crown pneumonia.

In fact, genetic testing companies also play an important role in the epidemic, providing nucleic acid detection, sequencing and other services.

Pan son gene company, a person in charge, told the twenty-first Century economic news reporter that the two generation of gene sequencer is urgently needed to help the patient make better diagnosis and treatment plan. After receiving the request from the businessman, the genetic sequencer GENETRON was donated. S5 and supporting facilities to improve the detection efficiency and detection rate of new coronavirus nucleic acids, reduce false negative discharge and missed diagnosis. In March 11th, the instrument arrived at the fire god Hill Hospital and started running.

Berry gene has also launched the third generation sequencing kit. Based on the new third generation single molecule sequencing technology platform, the kit can effectively detect the variation of nucleic acid sequence of the new crown virus, grasp the dynamic variation of the virus in time, and reduce the detection bias due to the variation of the virus.

However, Gao pointed out that many genetic testing enterprises, especially large scale enterprises, are mostly doing corporate social responsibility, and have not been commercialized. Gross margins are not as good as a mask, and enterprises have also paid a lot of price.

"Berry gene is one of the new nucleic acid detection units in Fuzhou. In order to ensure the normal resumption of business, the company has stopped all other businesses as a whole, and has made the whole Fuzhou base full, and the entire team has more than 100 people running 24 hours."

Gao believes that due to the impact of the epidemic, the gene industry, like other industries, will suffer a larger impact. This will also eliminate some of the backward production capacity and bring more impact to the industry, which is the "advertising effect" of the epidemic. "Before we need to explain to the public what genetic testing is, this epidemic has popularized this concept, which has a positive impact on the subsequent genetic testing industry."

In fact, as China's big gene valuation is chopped down and the industry chaos continues, the genetic testing industry begins to accept widespread public queries, coupled with serious homogenization and economic cold winter. From the second half of 2018, the industry began to gradually calm down.

The epidemic does not exclude capital from tilting to the genetic testing industry again. However, Gao believes that more thinking should lie in the quality of genetic testing business and whether it can further enhance the overall social benefits. "Medical institutions and clinical units are mainly responsible for disease treatment. The future medical business should also carry out more preventive measures and tilt towards public health."

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