THE STORY OF MACROGEN · Chairman Seo is an avid reader of the Diamond Sutra, reading it up to...

Challenge for World Best, Wish for the health Life - The Story of Macrogen Challenge for World Best, Wish for the health Life - The Story of Macrogen Challenge for World Best, Wish for the health Life - The Story of Macrogen Challenge for World Best, Wish for the health Life - The Story of Macrogen Challenge for World Best, Wish for the health Life - The Story of Macrogen Challenge for World Best, Wish for the health Life - The Story of Macrogen Challenge for World Best, Wish for the health Life - The Story of Macrogen Challenge for World Best, Wish for the health Life - The Story of Macrogen Challenge for World Best, Wish for the health Life - The Story of Macrogen Challenge for World Best, Wish for the health Life - The Story of Macrogen Challenge for World Best, Wish for the health Life - The Story of Macrogen Challenge for World Best, Wish for the health Life - The Story of Macrogen Challenge for World Best, Wish for the health Life - The Story of Macrogen Challenge for World Best, Wish for the health Life - The Story of Macrogen Challenge for World Best, Wish for the health Life - The Story of Macrogen Challenge for World Best, Wish for the health Life - The Story of Macrogen Challenge for World Best, Wish for the health Life - The Story of Macrogen Challenge for World Best, Wish for the health Life - The Story of Macrogen Challenge for World Best, Wish for the health Life - The Story of Macrogen Challenge for World Best, Wish for the health Life - The Story of Macrogen Challenge for World Best, Wish for the health Life - The Story of Macrogen Challenge for World Best, Wish for the health Life - The Story of Macrogen Challenge for World Best, Wish for the health Life - The Story of Macrogen Challenge for World Best, Wish for the health Life - The Story of Macrogen Challenge for World Best, Wish for the health Life - The Story of Macrogen Challenge for World Best, Wish for the health Life - The Story of Macrogen Challenge for World Best, Wish for the health Life - The Story of Macrogen Challenge for World Best, Wish for the health Life - The Story of Macrogen Challenge for World Best, Wish for the health Life - The Story of Macrogen Challenge for World Best, Wish for the health Life - The Story of Macrogen Challenge for World Best, Wish for the health Life - The Story of Macrogen Challenge for World Best, Wish for the health Life - The Story of Macrogen Challenge for World Best, Wish for the health Life - The Story of Macrogen Challenge for World Best, Wish for the health Life - The Story of Macrogen Challenge for World Best, Wish for the health Life - The Story of Macrogen Challenge for World Best, Wish for the health Life - The Story of Macrogen Challenge for World Best, Wish for the health Life - The Story of Macrogen Challenge for World Best, Wish for the health Life - The Story of Macrogen Challenge for World Best, Wish for the health Life - The Story of Macrogen Challenge for World Best, Wish for the health Life - The Story of Macrogen Challenge for World Best, Wish for the health Life - The Story of Macrogen Challenge for World Best, Wish for the health Life - The Story of Macrogen Challenge for World Best, Wish for the health Life - The Story of Macrogen Challenge for World Best, Wish for the health Life - The Story of Macrogen Challenge for World Best, Wish for the health Life - The Story of Macrogen Challenge for World Best, Wish for the health Life - The Story of Macrogen Challenge for World Best, Wish for the health Life - The Story of Macrogen Challenge for World Best, Wish for the health Life - The Story of Macrogen Challenge for World Best, Wish for the health Life - The Story of Macrogen Challenge for World Best, Wish for the health Life - The Story of Macrogen Challenge for World Best, Wish for the health Life - The Story of Macrogen Challenge for World Best, Wish for the health Life - The Story of Macrogen Challenge for World Best, Wish for the health Life - The Story of Macrogen Challenge for World Best, Wish for the health Life - The Story of Macrogen Challenge for World Best, Wish for the health Life - The Story of Macrogen Challenge for World Best, Wish for the health Life - The Story of Macrogen Challenge for World Best, Wish for the health Life - The Story of Macrogen Challenge for World Best, Wish for the health Life - The Story of Macrogen Challenge for World Best, Wish for the health Life - The Story of Macrogen Challenge for World Best, Wish for the health Life - The Story of Macrogen Challenge for World Best, Wish for the health Life - The Story of Macrogen Challenge for World Best, Wish for the health Life - The Story of Macrogen Challenge for World Best, Wish for the health Life - The Story of Macrogen Challenge for World Best, Wish for the health Life - The Story of Macrogen Challenge for World Best, Wish for the health Life - The Story of Macrogen Challenge for World Best, Wish for the health Life - The Story of Macrogen Challenge for World Best, Wish for the health Life - The Story of Macrogen Challenge for World Best, Wish for the health Life - The Story of Macrogen Challenge for World Best, Wish for the health Life - The Story of Macrogen Challenge for World Best, Wish for the health Life - The Story of Macrogen Challenge for World Best, Wish for the health Life - The Story of Macrogen Challenge for World Best, Wish for the health Life - The Story of Macrogen Challenge for World Best, Wish for the health Life - The Story of Macrogen Challenge for World Best, Wish for the health Life - The Story of Macrogen Challenge for World Best, Wish for the health Life - The Story of Macrogen Challenge for World Best, Wish for the health Life - The Story of Macrogen Challenge for World Best, Wish for the health Life - The Story of Macrogen

Challenge for World Best, Wish for the health Life - The Story of

THE STO

RY

OF M

ACR

OG

EN C

hallen

ge fo

r the W

orld

's Best, W

ish fo

r the H

ealthy Life

THE STORY OF MACROGEN

Challenge for the World's Best,Wish for the Healthy Life

58

79

89

Part 2Global Biotech Leader: The Start of a True Journey

EpilogueReaching for the Sky with All of Humankind

AppendixesHistory of MacrogenHealthy People, Happy World!

96

103

118

130

142

146

154

Contents

Prologue 06

Part 1 The First & The Best: Korean Biotech Legend

Pioneer of the Korea Biotechnology

Transgenic Mouse Model Business Venture

Flagship for Korean Biotech Ventures on KOSDAQ

Giant Step for Precision Medicine

Human Genome Project: The Future of Precision Medicine

Building up Precision Medicine

Heading towards Success: Glocalization Strategy

Emerging as a Global Leader in the World Bio Market

The $100 Genome, Expanding the Reach of Precision Medicine

Setting up a Creative Corporate Culture

A New Path to Another Leap Forward Beyond Crisis, Great Resilience

New Beginning: Development in a New Sustainable Business

Advances in the Global Market

15

18

24

28

36

41

45

Section 1

Section 1

Section 2

Section 2

Humanizing Genomics

MACROGEN

THE STORY OF MACROGEN 7Pr

olog

ue

“Every man over forty is responsible for his face,” said Abraham Lincoln. The face exhibits a person’s spiritual history. It mirrors how that individual has lived over the years.

Macrogen has a mere 24-year history, yet it is among the first generation of bio venture companies in Korea. Back then, even the term genomic analysis was something still unheard-of to many in Korea, which had no enterprises in that industry at all. That is why it is “an exciting success story,” says Chairman Seo. In fact, the founding of Macrogen was the greatest challenge in his life, one in which he staked everything he was to meet head-on. With his exceptional ability to envision the distant future, Chairman Seo has developed Macrogen into a leader in the global biotechnology industry. He described what happened in his life while he studied and taught on campus before talking about the launch of the corporation.

It was in 1970 when Chairman Seo entered Seoul National University College of Medicine. “The Square,” written by In-hun Choi, was a novel that all college students were expected to have read back then. After reading the novel, Chairman Seo decided to “set off on a journey for the square someday to find something meaningful.” Later, he left for the square with the conviction that “it is biochemistry that will save humankind .”

While serving as a professor at Seoul National University College of Medicine, he ran a sizeable laboratory with more than two dozen researchers whom he supervised and paid himself. This was an experience that would continue to help him with the management of organization and human resources. For 20 years, from the beginning

Prologue

Chairman Seo is an avid reader of the Diamond Sutra, reading it up to twice a day. “Although I don’t boast being a devoted Buddhist, reciting sutras comforts my soul,” he remarked. He has also been a vegetarian since the mid-1990s when he started gaining recognition for his devotion to genetic research on mice and following his success in acquiring domestic and international patents. “I used to eat meat at every meal, but I quit eating meat altogether when I turned 40,” he said.

This is probably why Chairman Seo looks so content. Maintaining a sense of exceptional humility, he made me feel at ease completely throughout the interview, even as he spoke about his family’s background as having numerous prominent doctors, his study at elite schools, his professorship at Seoul National University College of Medicine, and his founding of the country’s first publicly-traded biotech company.

8 Challenge for the World's Best, Wish for the Healthy Life THE STORY OF MACROGEN 9Pr

olog

ue

In 2015, Chairman Seo delivered a speech entitled “Hongik Ingan: Finding Our Way in the Genome.” “Hongik Ingan(To work for the bene-fit of all mankind)” was the founding ideal of Korea’s first kingdom Gojoseon, and it represents the ideal of providing a benefit for others, which has long been a part of the psyche of Korean people. Yet, looking back on our country’s history, we cannot help but to ask ourselves when were we strong enough to help others as a nation. Rather than helping humankind, we have been busy seeking merely to survive the threats posed by our powerful neighbors. Now, however, South Korea has without a doubt become an advanced country when it comes to medical technology. It is time to tap into this technology and use it to help humankind, especially those Asian people who are still struggling in poverty, marginalized, and living without the benefits of modern society.

Macrogen has never sought to make a fortune. It has not ever strived to become a big business. It has existed to actualize its “wish” and it will strive to do so by moving forward, as well.

of the 1980s, he also worked for a local pharmaceutical company as its business consultant, which gave him the opportunity to build an expansive network of connection with executives from multinational pharmaceutical companies. Naturally, these experiences and his broad network helped him discover his inner entrepreneurship.

The business venture named Macrogen was the embodiment of his beliefs and practical knowledge. After being destined to become a medical doctor due to his family background, Chairman Seo considers the founding of his business another predetermined course of events for him. He started the business with the intention of combining the morality of a medical doctor with the effectiveness that a start-up entity could contribute. Going through his fair share of difficulties, he says that he has never regretted starting the business nor has he ever lost his drive due to anything related to it.

Founders of big businesses tend to have exceptional mental fortitude and a clear sense of their objectives. Macrogen has continued to grow for 24 years under Chairman Seo’s stewardship; it has continued to “only dig in one place” as a Korean proverb recommends to those wishing to create a well. Motivated by Macrogen’s success, numerous start-ups have followed suit, yet few have survived. Though some struggled to create profits and stay ahead of the competition as Macrogen has, many more failed over the years because of their lack of commitment to a larger cause represented through an exceptional business management philosophy. By contrast, Chairman Seo started his business with a clear objective, and has done his utmost to remind himself of this objective every day. He is always very clear about the mission and responsibilities of Macrogen as a biotech company.

10 Challenge for the World's Best, Wish for the Healthy Life THE STORY OF MACROGEN 11

弘益人間

Ope

ning

rem

arks

Pa

rt 1

Th

e F

irst

& T

he

Be

st:

Ko

rea

n B

iote

ch

Le

ge

nd

People grow through the efforts they put forth when facing and

overcoming hardship or adversity, not when they turn tail and run

away. Growth comes with pain. This has been true around the

world and it continues to be true now.

Businesses are no exception.

We at Macrogen pride ourselves on the fact that ever since the

launch of Macrogen on June 5, 1997, we have achieved constant

growth by always meeting trials and tribulations head-on and by

preemptively responding to changes in the business environment.

The First & The Best

: Korean Biotech Legend

Part 1


Sect

ion

1_1

Pi

onee

r of

the

Kor

ea B

iote

chno

logy

Prior to the founding of Macrogen, Chairman Jeong-Sun Seo launched a college lab venture called NUDON (a homophone of “New Dawn”) in 1984 while serving as a professor of Seoul National University. While carrying out research on viruses and anticancer drugs with a research team at the University of Texas, he discovered an oncolytic virus and set up a biotech venture along with two American professors on the research team. However, the success that seemed within reach turned out to be elusive. The company narrowly lost to a competitor, and Chairman Seo had no choice but to close down. His three-year research failed to produce any significant or tangible results, and he had to give up on his goal of publishing a research paper in the journal Nature as well. However, the failure of his first venture provided him with the experience that proved to be invaluable in hindsight.

He learned two valuable lessons from this failure: one, “being a second mover in the biotech industry is of no value.” The other, “give up on the desire to make a fortune in this industry.” In the wake of his NUDON failure, however, Chairman Seo decided to stay away from business. Starting in 1988, he focused on his research with the goal of publishing his results in Nature. However, he experienced yet another failure with his research aimed at developing a monoclonal antibody.

At an international academic conference, he happened to encounter the notion of transgenic technology. He was awestruck. He immediately recognized that this would become a great technology capable of

Pioneer of the Korea Biotechnology

Section 1_1

Chairman Seo in 1988 working as a professor of biochemistry at SNU College of Medicine

Chairman Seo in 1999 with the staff of Macrogen, which was founded in 1997


Part

1 T

he F

irst

& T

he B

est:

Kor

ean

Bio

tech

Leg

end

the transgenic mouse gained traction, his research results were praised as being unrivaled both at home and abroad. He received a flood of interview requests. Newspapers covered the story as front-page news. One headline read “A Mouse That is More Expensive than a Cow.”

At this time, Chairman Seo began receiving massive R&D subsidies from the G7 Leading Technology Develop Program which was being promoted by the government. He received a total of USD 5 million from the Ministry of Science and Technology from 1993 to 1999, which enabled him to concentrate on his studies related to transgenic mice during this period. He never dreamed of starting another business back then. With sufficient R&D funds on hand, he had no reason to pursue money. It was the Ministry of Science and Technology that was financing his research that urged him to start the business. After careful consideration, he decided to launch a start-up. Through the start-up, he was qualified to receive the third level of government R&D funding. He could also reasonably expect the business to succeed due to the increasing demand of pharmaceutical companies for transgenic mice. Most importantly, Chairman Seo had a clear vision for transgenic technology.

At an apt time, an IT venture boom was sweeping the country. Finding investors was easy thanks to the fact that he was widely known across the country as the developer of the transgenic mouse. Investments totaling USD 375 thousand were committed by Green Cross, Korea Technology Investment Corporation, CJ CheilJedang, and the Tongyang Startup Investment Services Company. On June 5, 1997, Chairman Seo launched a biotech start-up called Macrogen.

opening a new chapter in biology.

As a medical doctor, he was not interested in genes themselves but rather what phenotypes those genes would express in cells and what diseases they could trigger. That is why he was so captivated by the idea of transgenic technology. As soon as he got back, he began preparing studies on transgenic technology. In 1990, he succeeded in producing a transgenic mouse in a laboratory he built and equipped with the necessary instruments.

But, research funding was far from sufficient. To continue with his studies, he contacted the Ministry of Science and Technology and the Ministry of Education and Human Resources Development multiple times to ask for assistance, only to be turned away each time. Fortunately, the Ministry of Science and Technology eventually conceded and decided to support his research, a departure from its policy of excluding current college professors from research funding eligibility, in recognition of his exceptional passion regarding his research into this new field of science. Following his being designated by the Ministry of Science and Technology as the first professor to be financially supported, he received a total of USD 750 thousand in research support over three years, from 1989 to 1992, with an annual allotment of USD 250 thousand.

Thanks to his devotion to his research, he succeeded in developingKorea’s first transgenic mouse cancer model. Animal testing is unavoidable in the drug development processes. Transgenic mice technology facilitates the evaluation of the pharmacological effects of drugs intended for use to combat various diseases. That is why the technology drew keen interest from the pharmaceutical industry. As

Sect

ion

1_1

Pi

onee

r of

the

Kor

ea B

iote

chno

logy


Part

1 T

he F

irst

& T

he B

est:

Kor

ean

Bio

tech

Leg

end

The “Macro” in Macrogen is an abbreviation of “macroscopic phenotype,” and the

“gen” in Macrogen refers to “gene.” Thus, the company name “Macrogen” means

the “macroscopic phenotype of genes.”

Humans and rodents are thought to have split from the same family about 26 million years ago during the Oligocene epoch in the Cenozoic Era. However, the common ancestor of humans and rodents remains in their genes like a fingerprint. Actually, the two species have a more than 80% similarity in their genomes with 90% of those genes located in identical locations. Rodents, such as mice, have the most similar genomes to human beings while being easy to control.

Scientists believe that if we learn more about mouse genes and genome features we can use that knowledge to unravel the mysteries of the human genome. It is estimated that scientists use millions of animals in laboratories every year in Korea and that around 80% of the animals used in experimentation are laboratory mice. Scientists use them to test if new drugs are safe for human use. The animals are also used in skin toxicity testing as well as anti-aging and anti-viral testing, among other things.

Most pharmaceuticals go through a preclinical process before being soldcommercially worldwide. The laboratory mouse is critical for both toxicity testing and preclinical studies designed to evaluate the active ingredients of new drugs. If any abnormalities are detected in preclinical studies, a

Transgenic Mouse ModelBusiness Venture

Section 1_2

Sect

ion

1_2

Tra

nsge

nic

Mou

se M

odel

Bus

ines

s V

entu

re

new drug cannot move on to the clinical stage because it could potentially cause harm to human beings, too, because the mouse has close proximity to humans concerning their genome and physiological features.

The demands for laboratory mice are diverse. There was a place that was producing “custom mice” to meet the various requirements of researchers. This place was the Ilchun Molecular Medicine Institute of the SNU Medical Research Center located in Yeongeon-dong, Jongno-gu, Seoul. It was the birthplace of a great variety of “transgenic mice with the genetics of infectious diseases” including those that were always stressed due to their genes, those that would contract stomach cancer at a predetermined time, and those without immune systems.

Thus, the history of Macrogen started in June of 1997 at this institute. Following the initial development of the technologies required to produce laboratory mice with special diseases in 1994, Chairman Jeong-Sun Seo who was then the head of a research institute launched a biotech venture with the purposes of developing and supplying custom lab mice. Although it began with a mere eight researchers from the

Macrogen started at the Ilchun Molecular Medicine Institute of the SNU Medical Research Center located in Yeongeon-dong, Jongno-gu, Seoul


research institute, Macrogen drew attention as an exemplary start-up lab.

Chairman Seo launched the laboratory business with a conviction that the outcomes produced by his research team could lead to a profitable, high value-added business. He was certain that this business would be lucrative since it would be much more economically efficient than the efforts of medical centers and pharmaceutical companies to produce transgenic mice on their own. Macrogen was also able to utilize the research center’s laboratory instruments and personnel, further bolstering the prospects of the start-up’s financial sustainability.

In fact, it was economically feasible to create made-to-order trans-genic mouse models that could be used by pharmaceutical companies and university R&D centers for cancer, diabetes, and immune deficiency research. At the time, a healthy rat would normally cost USD 1.5 but a lab mouse would cost USD 40. In 1996, there was a demand for approximately 700,000 white rats in Korea while the United States required more than 25 million white rats a year since the 1970s, indicating that the lab mice supply business had a bright future in Korea.

Another reason that Chairman Seo started his business in a research center was to create an environment where researchers could concentrate on their research without financial pressures. Although more than half of the researchers at the institute were doctors, it did not have the financial resources to compensate them adequately. The institute had a high turnover, so it had trouble carrying out long-term studies. Chairman Seo wanted to bolster researchers’ commitment by generating profits through the commercialization of their research results.

Part

1 T

he F

irst

& T

he B

est:

Kor

ean

Bio

tech

Leg

end

Sect

ion

1_2

Tra

nsge

nic

Mou

se M

odel

Bus

ines

s V

entu

re

The Ilchun Molecular Medicine Institute led by Chairman Seo had transgenic technologies to facilitate the study of diabetes, thymic carcinoma, and the scope of this research was continuously being expanded. Top priority was placed on identifying the impact of stress on the human body through genes, which was considered a subject that had the potential to shake the existing field of medicine to its core. Chairman Seo was recognized as a global authority on gene transfer/disruption. Most notably, he was praised as a pioneer in gene-based research regarding stress.

Macrogen was established as a path through which to commercialize the research outcomes of Ilchun Molecular Medicine Institute at the SNU College of Medicine backed up and led by Chairman Seo’s capabilities and experience. Until 1999, Macrogen produced over 70 kinds of rodents with special genes, with patent applications filed for seven of them. In October 1998, Macrogen received animal patents from the United States Patent and Trademark Office for the first time in Korea’s history for “diabetic rats” and “immunodeficient rats.”

On the back of this technological achievement, Macrogen received 30 orders for transgenic mice in the second year of its operations. The number jumped to 50 in 1999. The start-up also developed rats with specific genes disrupted and it supplied them at high prices. It pursued exporting the technology, and the company continued to expand.

In January 2001, Macrogen succeeded in cloning a mouse for the first time in Korea. The company’s Nuclear Transplantation Business Lab led by Dr. O-Yong Kwon, a researcher at Macrogen, and Prof. Tomohiro Kono of the Tokyo University of Agriculture cloned two mice. The mouse cloning was achieved through nuclear transplantation using the embryonic stem


cells from the development stage. Since the technology involved a difficult transplantation process, very few places, like the University of Hawaii, have succeeded in carrying out this type of cloning, which was being used indirectly in the study of the functions of human genes.

Producing gene knockout mice with specific genes added or subtrac-ted took an average of 15 months. Cloning shortened this period to just three months. It was expected that this breakthrough would be a great contribution towards finding the cures for various diseases and further identifying human gene functions through lab mice.

Transgenic and knockout (a.k.a. targeting) technologies generate organisms with new characteristics by inserting or removing specific genes into/from fertilized egg nuclei. In 2002, with the technology on hand, Macrogen embarked on the mission to produce and supply custom transgenic mice according to researchers’ requirements.

The transgenic mouse technology has been a major means of analyzing the functions of genes, which is a market known to have great potential.

A mouse sample that Macrogen succeeded in cloning for the first time in Korea (January 2001), attesting to the start-up’s outstanding technological capabilities

Part

1 T

he F

irst

& T

he B

est:

Kor

ean

Bio

tech

Leg

end

Sect

ion

1_2

Tra

nsge

nic

Mou

se M

odel

Bus

ines

s V

entu

re

The technology has only been acquired by approximately 10 companies from around the world since the infrastructure requirements include exceptional technological prowess, skilled scientists and an infrastructure such as a germ-free mouse facility. Under these circumstances, Macrogen became the first entity in Korea to begin offering commercial services in this field.

Furthermore, the Macrogen Lentivector Research Institute not only provided RNAi target sequence designs as required by researchers for their genetic testing to identify the functions of genes but also produced and supplied highly efficient recombinant viruses that researchers could conveniently use for their laboratory cell and animal tests. Macrogen’s service has been evaluated as having achieved a world-class level, and the company is well-equipped with technological superiority.

In April 2004, Macrogen produced the world’s first “fatherless mice” with only female mice's eggs. At the beginning of 2003, the company achieved significant research results in the field of parthenogenesis. The mice born without a father survived for 14 months, proving the reproductive capability. The research was remarkable in that it not only provided an opportunity to broaden perspectives regarding initial gene functions but also opened the door for application in a wide array of fields.

Nature, one of the most recognized scientific journals in the world, published Macrogen’s research results on April 22, 2004 (Title: Birth of parthenogenetic mice that can develop to adulthood) following a verification process that took over a year. The first publication of Macrogen’s research results in Nature became an opportunity for the company to advertise its world-class transgenic and knockout technologies to the entire globe.


Part

1 T

he F

irst

& T

he B

est:

Kor

ean

Bio

tech

Leg

end

Flagship for Korean Biotech Ventures on KOSDAQ

Section 1_3

In line with a growing interest in business ventures, investment in startups began to spike in the late 1990s in Korea. The number of venture capital firms shot up to 26 in 1999 after standing at just five and 12 in 1997 and 1998, respectively. So too did the number of angel investor clubs grow during this period.

According to the Small and Medium Business Administration, venture capital in Korea soared from USD 1.5 billion in 1997, to USD 1.8 billion in 1998, then finally to USD 2.6 billion in 1999, an increase of almost one trillion won in just the last year. The reasons for such a boom in venture capital firms included the growth of KOSDAQ, the deregulation of venture capital firms in terms of both their establishment and operation, and the government’s policy support.

In October 1999, Macrogen submitted a preliminary examination applicationfor an IPO in the KOSDAQ bourse through its underwriter Hanwha Invest-ment & Securities. It was a challenge for Macrogen: A bio venture lab had never attempted to list itself on the KOSDAQ market. Some viewed the attempt negatively arguing that the company’s annual sales were not yet big enough.

The underwriter, Hanwha Investment & Securities, reported that the annual sales of Macrogen from July 2018 to June 2019 were USD 614 thousand with research services accounting for most of that. It expected the company’s sales to rise to around USD 1.8 million with USD 25 thousand in ordinary losses.

About the application, the final decision was deferred at the initial review. Approval was given 15 days later upon reapplication. On December 22, 1999, Korea Securities Dealers Association held a KOSDAQ Committee meeting and passed the application of 13 businesses including seven existing companies and six start-ups including Macrogen. Its securities declaration was passed by the Financial Supervisory Service. Following initial public offering in January 2000, Macrogen was registered with the KOSDAQ Securities Exchange on February 22, 2000.

It was extremely hard even for veteran “venture” institutional investors to predict Macrogen’s future stock prices because its key product was not on the market yet. Yet, pharmaceutical stocks were skyrocketing then in Korea. It was partly due to the popularity of biotech stocks at the NASDAQ Stock Market of the United States. Another reason was the Korean government’s announcement of biotech support industrial policies, which drew investors’ keen attention to biotech stocks in Korea Exchange.

Around two years after Macrogen was launched, investors were showing a lot of interest in Macrogen’s DNA chip, a collection of micro-scopic DNA spots attached to a solid surface, as the company’s flagship product. Korea did not have a DNA chip market. However, expectations were that the growth of Macrogen would explode once blood tests began to be replaced with genetic testing based on DNA chips.

These expectations were shared by numerous investors: Macrogen’s IPO was record-shattering. The rate for its stocks began at 55.28:1 on January 31 and ended up with 968.31:1 (Hyundai Securities) at its highest, and it was 537.27:1 (Hanwha Investment & Securities) on February 1. Application for stocks (100%) filed with 14 securities

Sect

ion

1_3

Fla

gshi

p fo

r K

orea

n B

iote

ch

Ven

ture

s on

KO

SDA

Q


The local media extensively covered the story of Macrogen being listed on the KOSDAQ, the first domestic biotech company to achieve such a feat

Macrogen grew rapidly on the back of its KOSDAQ listing. This photo shows its scientists working on DNA analysis in the development stage

firms amounted to more than USD 830 million (KRW one trillion). The offering price was set at USD 7.5 (face value: USD 0.5) (KRW 9,000) for an estimated total amount of USD 5 million. Macrogen raised a total of USD 3 million including amounts from institutional investors (340,000 shares) and the employee stock ownership associations (136,000 shares).

Macrogen shares began to be traded on February 22 in the KOSDAQ market at the offering price of USD 7.5 (face value: USD 0.5). The stock price rose to USD 8.4 (KRW 10,050), an increase of USD 0.8 (KRW 1,050) (11.66%), as soon as trading started on that day, and ended the day at the day’s upper limit. Most notably, at 9:30 am, the purchase offer reached 10.35 million shares while there was no offer for sales at all. The total number of Macrogen shares stood at 3.2 million. Securities firms said that the popularity of the small company’s shares was unpre-cedented in the history of the Korea Stock Exchange. Macrogen’s stocks hit the upper limit for 26 consecutive days. Their price topped USD 83 in just one month, eventually reaching USD 154. The company’s stocks set records in multiple areas.

Macrogen’s listing on the KOSDAQ market was a great honor for the company that had just become “Korea’s first publicly listed biotech venture.” It also fueled social interest in the country’s nascent biotech industry and in other biotech start-ups. Macrogen succeeded in drawing investors’ close attention and participation in biotech start-ups. It also played a leading role in promoting “Bio Korea,” a vision for the development of the biotech industry in Korea through close cooperation between the government and those within the industry.

Sect

ion

1_3

Fla

gshi

p fo

r K

orea

n B

iote

ch

Ven

ture

s on

KO

SDA

Q


The transgenic mouse business was not the only objective of Macrogen. In fact, Macrogen had bigger dreams, and Chairman Seo was looking farther into the future. He speculated that the 21st century was the age of biotechnology with genetics-based predictive medicines playing a crucial role. He figured that Macrogen could make great contributions in this new environment.

At the outset, Macrogen was focused on the production of transgenic mice with its revenues largely coming from the sale of mice and research contracts in the field of mice. The transgenic mice business, however, was just a part of what the company was aiming for. Macrogen wanted to earnestly partake in the Human Genome Project, dubbed a “neo gold rush,” emerging as the prize that the whole world was competing to win first.

Of the up to 3 billion DNA base pairs that a human being has, appro-ximately 100,000 genes are presumed to play a role in defining human characteristics. Macrogen wanted to concentrate on identifying those genes and figuring out their functions as its new commitment. 3 billion DNA base pairs would require 200 phonebooks if they were being transferred into letters of the alphabet. Sequencing them would take a person 100 years, assuming they are able to read one pair every second, without pause.

So, Macrogen began to focus on the development of a computer

Giant Step forPrecision Medicine

Section 1_4

Sect

ion

1_4

Gia

nt S

tep

for

Prec

isio

n M

edic

ine

program that could identify core genes efficiently. From the get-go, Macrogen poured many of its resources into “bioinformatics” with the conviction that incalculable medical value would come from the company’s effort to identify genes associated with disease and death and to influence them. Through the combination of biotechnology and information technology, bioinformatics analyzes and interprets gene sequencing using computer hardware and software. It is crucial in the process of identifying each gene’s function and in the industrialization of biotechnology.

Following the announcement of the Human Genome Project (HGP) by the National Institutes of Health (NIH) of the United States in June 2000, countries around the world embarked on an all-out competition to gain an advantage in bioinformatics. When it comes to competitions in biotechnology, a genome map becomes useless without the ability to analyze genetic information. That is why Macrogen determined to focus on constructing its own bioinformatics capabilities.

The next undertaking Macrogen concentrated on was DNA chips. In November 1999, it succeeded in developing the prototype of the DNA chip 0.4K, used for research purposes, which sequenced approximately 400 genes of various kinds on a glass plate as big as a thumbnail. It was a sophisticated tool devised to easily determine what disease a person has contracted or which gene in the patient’s body is problematic as soon as a person’s cell is dropped on the plate. A chip like this cost as much as USD 3 thousand back then.

In May 2000, Macrogen began marketing the “MAGIC 2.4K” (Macrogen’s Advanced Genome Information Chip 2.4K), a DNA chip composed of

Part

1 T

he F

irst

& T

he B

est:

Kor

ean

Bio

tech

Leg

end


ⓐ The DNA Chip 0.4K was developed in November 1999, and the DNA Chip 2.4K was developed six months later in May 2000

ⓑ A prototype of DNA Chip 0.4K was developed in November 1999

ⓒ Nuclear Transplantation Center established for transgenic and knockout mouse supply services (photo: nuclear transplantation in the mouse)

ⓐ

ⓒ

ⓑ

Sect

ion

1_4

Gia

nt S

tep

for

Prec

isio

n M

edic

ine

approximately 2,300 Koreans genes, which it developed as the first of its kind in Korea. MAGIC 2.4K contained more than 500 pieces of genetic information which were not known to others. It would play a key role in identifying new genes and figuring out their functions and diagnosing various kinds of diseases while they were still in their initial stages.

The DNA chip market was estimated to be worth billions of US dollars since DNA chips were used for drug development and genetic disorder diagnosis worldwide. In the first year, the company sold USD 414 thousand worth of DNA chips, but anticipating a sharp upturn, it proactively began to pursue this business.

In April 2000, Macrogen launched “MAGIC 4.6K” (Macrogen’s Advanced Genome Information Chip 4.6K), a DNA chip composed of 4,608 Korean people’s genes. It considerably reduced the previous degree of testing error: A total of 9,216 genes were planted on a single chip with each of the genes in duplicate. Each chip was composed of around 3,200 known genes, over 1,000 unknown genes, and 380 control genes. All the genes were secured by Macrogen itself through KOGEN 100K, a project to establish a database of Korean genes.

The development of MAGIC 4.6K was considered a significant achieve-ment because it could be used as an early disease testing kit through the acquisition of new information regarding various diseases based on accumulated data. Given that the number of genes expressed in cells average 5,000-7,000, the utilization of 4.6K developed by Macrogen was expected to facilitate examinations of the state of individual gene expressions very efficiently.


Macrogen was planning to pursue predictive medicine tailored to the needs of each individual based on their genetic information secured through such undertakings. Macrogen envisioned growing into a genetic information company that could tell people, for example, “genetically you are likely to develop cancer within a year,” or “this prescription is effective for you, considering your genetics.”

In an interview, founding Chairman Jeong-Sun Seo explained why he launched Macrogen and started doing business as follows.

“Biotechnology is undergoing a revolutionary shift. Following the

success of the human genome project, biology is transforming into

information biology and medicine is turning into information medicine. No

one can lead these massive changes effectively through only their individual

lab studies.

BT (biotechnology) has already become a big field of science. Lab studies

alone cannot solve complex human diseases, let alone catch up with the

speed of technological innovation. We have to approach these problems

from the standpoint of a big system, like, for example. a corporate

organization, that could marshal in massive investment and many

scientists. I did not launch Macrogen to satisfy my personal desires. I did

so to realize a vision of biotechnology research at the national, social, and

academic level.”

Macrogen disclosed lists and data of the Korean cDNA (complementary DNA) used for the development of the chip on its website while supplying research-tailored cDNA to clinicians and researchers. Upon launching the 4.6K DNA chip, the company organized the MG DNA Chip

Sect

ion

1_4

Gia

nt S

tep

for

Prec

isio

n M

edic

ine

Club composed of clinicians and physicians working in basic fields with the purpose of increasing DNA chip users. This club integrated various medical research clubs divided along medical doctors’ various specialties into one with the ultimate goal of promoting DNA chip research throughout the country.

In April 2000, Macrogen took the lead in launching the Lab Venture Council (chaired by Macrogen Chairman Jeong-Sun Seo) aimed at promoting information exchange among more than 100 lab venture businesses. While supporting local lab start-ups, the company was active in building a robust network. Unlike internet start-ups, biotech start-ups must commit a massive amount of long-term investment. The council works to prevent overlaps in research among member companies through joint research and marketing and to achieve a synergistic effect by having members share their own technologies with other member companies.

In 2000, the government also expressed strong policy commitment to developing the biotech industry. On October 6, 2000, the government held the Conference on Biotech Industry Development Planning presided by the president at the Blue House to select the biotech industry as a key strategic industry, shake up the foundations for more rapid development of biotech industry by 2003, and cultivate Korea as a global leader in biotechnology by 2010. At the conference, the government made it clear that it would have the country’s biotech technology develop to the G10 level, from its level of 60%, by 2003 and then to the G7 level by 2010.

Jeong-Sun Seo, then the CEO of Macrogen, delivered a presentation

Part

1 T

he F

irst

& T

he B

est:

Kor

ean

Bio

tech

Leg

end


on the case of Macrogen, as a representative of the country’s venture start-ups. “The success of the bio revolution depends on speed,” he emphasized. “It should be led by venture start-ups united through their spirit to seek out challenge and their cutting-edge technologies.” Reflecting his pride in the company and his clear direction for future objectives, and a passion for resolving challenges, CEO Seo mentioned the business areas and technological achievements of Macrogen as follows:

“Macrogen has plenty of challenges to face. 97% of the 3 billion

base pairs are useless. Our company is implementing a strategy of

differentiation to analyze the critical 3% only with just a 3% financial

commitment. We will analyze Koreans’ genetic information on our own

and provide the results as key content for information medicine.

Furthermore, Macrogen will promote a Northeast Asian genome project

and set up a genome consortium in which Korea, Japan and China can

participate. We will then apply the expertise we have accumulated during

the Korean genome project to genome studies on 56 minorities in Japan

and China. Most notably, 24% of Japanese people are genetically the

same as Koreans. Discussions are ongoing with China. Backed by the

public sector, including Seoul National University, things will progress

much more swiftly.

Macrogen is equipped with valuable funding gathered from the NASDAQ

market, top-tier technological solutions, and, most importantly, a spirit

to face challenges head on in order to grow into a world-class biotech

company. As a pioneer in the Korean biotech industry of the 21st

century, Macrogen will spare no effort to fulfill its mission.”

Part

1 T

he F

irst

& T

he B

est:

Kor

ean

Bio

tech

Leg

end

Macrogen attracted local media attention at Bio Expo Japan 2003 in May 2003

In Aprill 2004, Macrogen produced the world's first fatherless mice with the only eggs of the female mice. The Macrogen Mouse Center opened its doors

in February 2002 (left), and a thesis entitled “Birth of parthenogenetic mice that can develop to adulthood” was published in Nature (right)


Macrogen started a bio boom in Korea, though there remained many things that had to be done for the creation of a bio venture ecosystem in the country. In August 2003, the government included the biotech industry among the top 10 next-generation growth engines that would take the lead in bringing about an era of USD 20,000 GDP per capita. A next-generation growth engine industry was defined as being “an industry with high potential to develop world-class products, an original technology for which an international license-out (transferring technology sales rights to other entities in exchange for royalties) would be possible even prior to product development within the five years leading up to 2008.”

The local biotech industry argued, “The Korean biotech industry’s R&D capacities are at the highest level in the world,” or “Korea is right behind the USA, Europe, and Japan,” although little evidence backed up these assertions. In terms of production capacity in 2005, Korea’s biotech industry (new biopharmaceuticals, bio viscera, and biochips) accounted for a mere 1.4% of the global market.

Korea was isolated from the field of corporate alliances gaining traction worldwide, which was obvious from the statistics of international alliances between biotech companies or pharmaceutical companies and biotech companies. The figures were 337 partnerships for the USA, 105 for the UK, 103 for Germany, 57 for Japan, and 53 for Canada. Korea had just three cases of alliance with foreign biotech companies, even behind the figures for China and India which had five and four, respectively.

Beyond Crisis, Great Resilience Section 2_1 Most domestic pharmaceutical companies were small even though some of them were expanding their business portfolios into the field of biotechnology: 85% of 270 pharmaceutical companies authorized by the Korea Food & Drug Administration for drug manufacturing had less than USD 8 million in total assets. Still the prospects of the local biotech industry were perpetually being viewed through rose-tinted glasses. The United States government even began supporting the development of the country’s biotech industry through the Advanced Technology Program (ATP) since 1990.

The Korean government’s decision to support the development of the domestic industry was welcome news. It was planning to invest around 800 billion in the biotech industry in 2007 alone. The problem was that the investment did not lead to any remarkable results: Few understood where and how the public funds were spent and what effects the expenditure really made.

Barriers could be summed up with the following three points: there was an under-developed environment for research commercialization, a shortage of professionals, and a shortfall in technologies and infrastructure.

The biotech industry is, at its core, a race against time. Even the US had a long way to go in this regard: It took a whopping 16 years to commercialize an original technology and launch a related product with a clinical test alone taking seven years on average.

In Korea, the commercialization time was being reduced. Yet bio viscera

Part

1 T

he F

irst

& T

he B

est:

Kor

ean

Bio

tech

Leg

end

Sect

ion

2_1

Bey

ond

Cri

sis,

Gre

at R

esili

ence


took 8.4 years, biologic drugs 6.5 years, and bio chips 5 years, from product development to product commercialization. Since product development took a long time, stable funding was critical. The local investment environment was still based on short-term investment recovery. It was hard to find investors willing to wait for so many years. Thus government assistance was the only major financing source in Korea.

As such, biotech companies hastened commercialization. Instead of focusing on the development of original technologies, they leaned into the development of products that they could sell right away. It was a vicious circle set in motion. On top of that, some biotech companies degenerated into playing “high stakes money games” in the stock market, disappointing many investors.

Under these circumstances, Macrogen presented a corporate vision that included “building a database for integrated genetic information about each race based on the human genomic information and growing into a flagship biotech company in Asia equipped with the capacity to predict diseases and develop new drugs” before shaking up its organization with the aim to promote more R&D and new business.

At a board of directors meeting held in October 2003, Macrogen appointed Hyun-Seok Park, head of Bioinformatics Research Institute, as its chief executive officer while Chairman Jeong-Sun Seo began to focus on R&D and overseas business. This shakeup of the corporate leadership was determined to establish a management system that could maximize synergy.

CEO Park said that he would concentrate on building a stable IT manage-ment system by racing to set up a robust IT infrastructure. This was aimed at realizing goals as instantly as they are thought, and a transformation of management from top-down to bottom-up was deemed to be a catalyst to achieve just that.

To promote its employees’ well-being, Macrogen increased off-work Saturdays from being just once a month to once every two weeks before finally settling on five-day workweeks. It was at this time that Macrogen reasserted its management philosophy. Placing the highest priority on ethics, it would strive to fulfill the duties of a public company by improving people’s health, bringing about a brighter future for the country, and ultimately benefiting all of humankind.

Guests visiting the Comprehensive Biotech Center on November 8, 2000

Part

1 T

he F

irst

& T

he B

est:

Kor

ean

Bio

tech

Leg

end

Sect

ion

2_1

Bey

ond

Cri

sis,

Gre

at R

esili

ence


Macrogen announced a three-stage corporate development strategy, too. The first stage involved starting a genetic analysis-related instru-ments business required for the company to realize personalized medicine. US businesses paid high prices for chips because they included research expenses in the price. Macrogen however established a strategy to provide chips at much lower prices to start the medical revolution and create a biotech boom. Through this strategy, the company wanted to herald in the era of genomic medicine by proactively leading not only the domestic market but the global market as well.

The second stage involved reinvestment of the company’s sales revenues from the instrument business into its R&D activities. Macrogen assumed that this reinvestment would become sustainable when each business unit earned USD 10 million or more in annual sales.

The third stage involved the promotion of the new protein drug and personalized preventive medicine business. Macrogen planned to supply protein drugs through MGenbio, a company specializing in the research of xenotransplantation that was established in July 2002, and offer diagnosis software based on genomic data to promote the development of personalized predictive medicine. Macrogen aimed at enabling 50% of all domestic medical doctors to use their diagnosis software and sought to build successful partnerships with various hospitals across the country.

The personalized medicine market was slower in its growth than Macrogen had anticipated. Initially, the company’s key product was lab mice. In the late 1990s when Macrogen was launched, demand for transgenic mice was on the rise by the healthcare industry seeking to develop various drugs. However, the domestic drug development market slowed down. The company began to suffer as mice sales dropped to between USD 0.8 million to 1 million a year. The Korean financial crisis of 1997 exacerbated the situation facing Macrogen, which was pressured to change its course to survive the crisis. Although it would continue seeking to develop the personalized medicine market in Korea, the company had to increase its sales revenues and find another flagship product.

On June 26, 2001, Macrogen announced that it had completed the Korean BAC (Bacterial Artificial Chromosome) Clone Map with one hundred thousand BAC clones. The news was shocking to many: A start-up in Korea completed the Korean BAC clone map just a year after the world-shattering news about a map of the human genome.

All human beings belong to one species. They, therefore, have the same genetic information. Yet each human being is different in terms of their height, skin color, hair color, and numerous other things, because of differences in SNPs (Single Nucleotide Polymorphisms).

Part

1 T

he F

irst

& T

he B

est:

Kor

ean

Bio

tech

Leg

end

Sect

ion

2_2

New

Beg

inni

ng:

Dev

elop

men

t in

a N

ew S

usta

inab

le B

usin

ess

New Beginning:Development in a New Sustainable Business

Section 2_2


SNPs also include the differences between various races and ethnic groups. Scientists speculate that racial differences amount to merely 0.01% of the human genome’s composition.

That however means a difference of 300,000 bases. The necessity of SNP study was well-warranted, because just a couple bases could determine disease incidence. Celera Genomics, an iconic biotech company of the United States, announced that it had carried out genomic analysis for all races. Yet the truth was that white people were overrepresented with Asians accounting for less than 10% of the samples in the analysis. That is why Macrogen’s completion of the Korean BAC clone map was so significant.

The company was making considerable progress in its study of microbial genomes when it started to work on a draft of the Korean BAC clone map. In August 2000, Macrogen succeeded in interpreting the entire genome sequence of Zymomonas mobilis. For the first time in the world, it figured out the structure of Zymomonas mobilis which has high industrial values as an ethanol-producing microorganism. fermentation strain. Thus, Korea emerged as the eighth country in the world, following seven advanced countries including the United States, to have analyzed the entire genome sequence of an organism. Macrogen was praised as a pioneer that enabled the country to join the ranks of other global leaders in genome research.

Macrogen paid close attention to the microbial genome research for microorganisms with industrial value. A microbial genome, with just 1 million to 40 million base pairs is much smaller than that of an animal or a plant whereas the proportion of functional genes in their

Part

1 T

he F

irst

& T

he B

est:

Kor

ean

Bio

tech

Leg

end

Sect

ion

2_2

New

Beg

inni

ng:

Dev

elop

men

t in

a N

ew S

usta

inab

le B

usin

ess

genomes is much higher than more complex organisms, meaning that microbial genome research is relatively easier. On the other hand, most microorganisms being analyzed were already being used for industrial purposes or could replace existing chemical processes with strains for fermentation. Therefore, microbial genome research results were applicable to industrial processes immediately after a functional analysis was carried out based on genomic analysis.

In November of the following year, Macrogen registered the research results with the NCBI (National Center for Biotechnology Information), the world’s largest gene bank, under the NIH (National Institutes of Health) of the United States. Prior to that, some Korean organizations filed their partial genome interpretation outcomes with the NCBI, but Macrogen was the first in Korea to register whole genome sequencing information with the agency.

In January 2005, a Macrogen research team that had developed “super alcohol bacteria” using the Zymomonas genome sequencing information had their research paper published by Nature Biotech-nology, a highly recognized British scientific journal.

On the back of its success with whole-genome sequencing of the Zymomonas in 2000, the Korean BAC clone mapping in June 2001, and the genomic analysis of Xanthomonas, Leuconostoc, and Chinese cabbage, Macrogen was able to secure an unrivaled competitive edge in their gene sequence services.

In this context, Macrogen decided to expand its business portfolio to include the high-quality genetic analysis services market. In January


The genome sequence of an ethanol-producing microorganism, Zymomonas mobilis

2000, the company launched its genetic analysis service business with the expectation that demand for professional genetic analysis services would continue to rise. Macrogen purchased an ABI 3700 capillary sequencer from Applied Biosystems of the United States and began offering CES (Capillary Electrophoresis Sequencing) services in Korea.

Macrogen’s decision was wise: the response of the domestic biotech industry to the services offered was explosive. Still, domestic demand was limited. Macrogen concluded that globalization of its services was mandatory for its continuous growth. The problem was that competition in the advanced market centered around biotechnology research was already fierce. Macrogen decided that securing price competitiveness was key to success in the market. It also needed to take an eye-catching approach to making its first steps in the market.

Advances in the Global Market

Part

1 T

he F

irst

& T

he B

est:

Kor

ean

Bio

tech

Leg

end

Sect

ion

2_3

Adv

ance

s in

the

Glo

bal M

arke

t

Section 2_3

“That’s enough for sequencing”

In February 2002, the world-renowned scientific journal Nature published an ad for a Korean biotech venture company. In the ad, Macrogen offered its genetic analysis service for a mere five US dollars. Having recognized the limits of the domestic market, Macrogen took a bold measure to make inroads into the global market.

The ad was really provocative: five dollars was a truly incredible price tag for anybody in the genetic analysis service market, which was dominated by American firms.

Macrogen decided to expand its global presence through a low pricing strategy for the purpose of taking the lead in ushering in the era of personalized medicine through Macrogen’s full-fledged genetic analysis services. By then, Macrogen already possessed unrivaled market competitiveness thanks to the remarkable achievements made in genetic analysis including the whole-genome sequencing of the industrial microorganism Zymomonas since early 2000 and the Korean BAC clone mapping was done the following year.

Macrogen sharply reduced the time and money necessary to complete the Korean BAC clone mapping by utilizing the results of the Human Genome Project announced in June of 2000. The company boldly adopted the “shotgun approach” used by Celera Genomics of the United


Sect

ion

2_3

Adv

ance

s in

the

Glo

bal M

arke

t

States in which they randomly cut human genes and used them in DNA sequencing. The company also continued to reduce the quantity of reagents necessary, to just half of previous requirements, then a quarter, and eventually just one eighth. It was improved techniques that enabled Macrogen to cut down on the reagent volume despite using the same types of reagents and instruments. Technological optimization was the only way for a start-up in a country far behind in the field of genetic analysis to quickly catch up with market leaders in developed countries.

The five-dollar strategy was not taken seriously by many. Then, Macrogen offered free analysis service for the first 20 pairs, and the results were a great success. In March 2002, Kumamoto University in Japan placed an order. Following continuous inquiries, Macrogen was overwhelmed by the enthusiastic market response, which was attributable to the company’s flawless analysis services that were being offered at low prices. Macrogen maintained its price competitiveness by improving data precision and optimizing the conditions for the utilization of genetic analysis reagents, accounting for over 30% in costs, through its own research.

The advertisement offered genetic analysis services at a quarter of the market price, which was absolutely extraordinary by anyone’s standards. In 2002, an analysis of 1,000 bases, out of 3.2 billion total bases, usually cost USD 15-20. Furthermore, the market was dominated by US firms. Yet, Macrogen still decided to challenge market leaders with its extraordinary pricing policy and aggressive marketing strategy. The success Macrogen achieved was legendary among biotech ventures around the world.


Behind the company’s incredible CES business growth was the “five-dollar price, 48-hour turnaround time” strategy. Macrogen’s overseas competitors asked for about USD 20 for the service and had a turnaround time of at least seven days, even when they were serving local customers. Macrogen’s approach was unprecedented, an innovation that captivated the world’s biotech researchers.

Another critical success factor was the incorporation of international express delivery services and Korea’s top-tier information technology into the company’s CES services. Macrogen built partnerships with international express delivery service providers to secure its customers’ genetic samples more quickly. In addition, it developed the LIMS (Laboratory Information Management System), a management system for web-based online genetic analysis services, in order to provide customers with sample analysis results in real time. By integrating these three core elements most efficiently, Macrogen was able to achieve a creative and innovative global service for genetic analysis.

As a result, customers anywhere in the world can send Macrogen their genetic samples through one of the international express delivery services like FedEx, DHL, or TNT and have Macrogen take care of the rest through its automated genetic analysis process. The analysis results were delivered within 48 hours. The analysis process was shared throughout the LIMS in real time. Customers, therefore, were able to not only monitor the entire process but ask for additional services too. For such a creative and effective service process, Macrogen obtained an ISO 9001 certification in 2004 along with global recognition for its outstanding genetic information processing capacity and efficiency.

Part

1 T

he F

irst

& T

he B

est:

Kor

ean

Bio

tech

Leg

end

Sect

ion

2_3

Adv

ance

s in

the

Glo

bal M

arke

t

On the back of its success in Korea, Macrogen established its US subsidiary called Macrogen Corp., (presently Psomagen, Inc.) in December 2004 and began its CES service for the US market in August the following year. Located in the Maryland Technology Development Center in Rockville, Maryland, the American subsidiary equipped itself with the latest genetic analysis research facilities, secured top-tier professionals, and has been serving customers using the same genetic analysis expertise and systems that Macrogen has been developing for decades. It provides researchers on the East Coast with the highest quality analysis results at lower prices and continues to expand its market in that important part of the country.

In 2005, Next-Generation Sequencing (NGS) was commercialized by utilizing a specific DNA synthesis method. Instead of individual genes, NGS analyzes hundreds of genes at the same time, greatly reducing time required for analysis. On top of that, analysis costs were significantly lowered.

In 2006, Macrogen installed NGS equipment, established a new service system, and began to offer the NGS service. In addition, Macrogen launched Axeq, a global brand of its premium genetic services, to differentiate their global services from the company’s existing CES service. Macrogen laid the foundation for a continuous corporate growth in not only the CES service market but also the NGS service market on the basis of high service quality, quick turnaround time, and reasonable pricing.

The number of Macrogen’s overseas genetic analysis service customers spiked from 3,200 in 60 countries in 2005 to 10,000 customers


ⓐ December 2004: The US subsidiary was established

ⓑ November 2007: The Japan subsidiary was established

ⓒ June 2008: The Europe subsidiary was established in the Netherlands

ⓐ

ⓑ ⓒPa

rt 1

The

Fir

st &

The

Bes

t: K

orea

n B

iote

ch L

egen

d

in 100 countries in 2008. Most of these customers were scientists working in biotech research centers or schools rather than individuals. So, Macrogen secured a large number of biotech researchers from all around the world as its customers. This expanded customer base naturally led to sales growth. In 2002 when the company began its overseas services, revenues from overseas genetic analysis services stood at USD 35 thousand. In 2005, this expanded 100 times to USD 3 million in 2005 and almost 300 times to USD 9 million in 2008.

Macrogen secured a solid position as an international corporation in the global genetic analysis services market. It also laid the foundations for sustainable corporate growth by leading the world market through its high quality services offered at competitive prices. This success was not limited to its head offices. Its overseas subsidiaries, including those in the United States and Japan, were also able to enhance their business capabilities and achieve considerable success in their territories. The progress Macrogen made was all the more significant, considering these international implications.

Macrogen anticipated that the future of medicine will develop in two major directions: information medicine and reproductive technologies based on genetic information; and organ transplantation and stem-cell therapy using transformation technologies. In this context, Macrogen established Psoma Therapeutics, a company devoted to the development of new drugs through the discovery of disease-related genes, in June 2002. The next month, the company launched Sunjin, a cattle and pig farming company, and MGenbio, a company specialized in research related to xenotransplantation. This was all possible thanks to the success of the Functional Genome Project for Northeast Asian


Populations which the company jointly pursued with a huge research team from the Seoul National University College of Medicine starting in 2003.

Macrogen also began to make significant investments into biotech-nology around this time. In 2001, it founded MGmed to provide medical services based on genetic information. It was MGmed that provided Macrogen’s BAC chip-based chromosome disorder diagnosis services that were approved by the Ministry of Food and Drug Safety. In 2006, Macrogen acquired NeoGenetic Co., a molecular diagnostics company, in order to make inroads into the rapidly growing molecular diagnostics market.

MGmed launched the I-Check Service that was capable of checking infants for over 20 diseases through a blood test. The check was particularly useful when a child was suspected of having a growth-related disorder, a sexual development disorder, some physical deformity, an intellectual disability, autism, expressed symptoms of unknown origin, or chromosomal disorders due to some relevant family history.

From its KOSDAQ listing in 2000 to July 2001 alone, Macrogen invested approximately USD 4 million into eight bio business ventures, including GreenGene Biotech, a plant DNA chip development company, and REGEN Biotech, a manufacturer of active biological materials and regenerative medicine, in addition to 600 thousand and USD 1 million invested over-seas in Bio-Micro Systems and VistaGen Therapeutics, respectively.

Part

1 T

he F

irst

& T

he B

est:

Kor

ean

Bio

tech

Leg

end

Sect

ion

2_3

Adv

ance

s in

the

Glo

bal M

arke

t

Such proactive investment and support activities for bio venture businesseswere in line with Macrogen’s management philosophy of fulfilling its public responsibilities as the country’s leading bio venture by accelerating the commercialization of local biotechnologies and continuing to cultivate the local biotech industry.

Macrogen’s organizational operations were unique in the following four aspects:

First, except in the initial start-up period, the company was run by a professional business manager instead of Chairman Seo. The Chairman presented directions for organizational operations and long-term research and development strategies, in addition to being devoted to his research and the development of core technologies. Personnel related matters, including employment management, training, and hiring, were carried out independently by the heads of each business division.

Second, high priority was placed on communication between manage-ment and staff. The company believed that the most important role of managers was to deliver clear-cut statements on issues to staff as a critical step toward companywide consensus building. Given the characteristics of the biotech industry, Macrogen encouraged business divisions to have inter-division meetings frequently so that they could keep educating one another as parts of a learning organization.

Third, the focus was placed on managers’ job rotation under the conviction that they could only run the company in a balanced way if


they were familiar with general companywide conditions. For instance, a CFO with a financial background was assigned to technical or overseas sales posts as needed.

Fourth, organizational efficiency was critical for the success of biotech business venture. Macrogen has been ISO 9001 certified since October 2004 and has carried out other various innovation activities including Six Sigma. In addition to technical development, Macrogen also worked hard to bolster its management and marketing functions by shifting the focus from research and production to marketing and sales during its organizational restructuring efforts.

In addition, Macrogen introduced a companywide in-house reading club system as part of its efforts to promote a knowledge management system. Through an employee suggestion system, the company began actively reflecting employees’ creative ideas in its business and management decisions. To boost its employees’ wellbeing, Macrogen instituted a five-day workweek introduced employee welfare benefits, financed in-house club activities, helped pay employee tuition fees and funeral costs, ran a short-term loan system for employees, and established various employee rewards and stock option programs.

Part

1 T

he F

irst

& T

he B

est:

Kor

ean

Bio

tech

Leg

end

Sect

ion

2_3

Adv

ance

s in

the

Glo

bal M

arke

t

THE STORY OF MACROGEN 57

Pa

rt 2

Glo

ba

l B

iote

ch

Le

ad

er:

Th

e S

tart

of

a T

rue

Jo

urn

ey

The Korean biotech industry started in an environment replete with

incredible shortages in virtually all aspects including policies, the

workforce, technologies, and facilities. Still the country’s biotech

industry has made massive, unbelievable progress over the years so

that it may now compete with countries pioneering in the field of

science around the world.

24 years of Macrogen: it is not just a story of the past. It is the

country’s unfolding present moment. It is also the future of the

biotech revolution. Macrogen now stands ready to set off on a true

journey towards the bio revolution.

Global Biotech Leader

: The Start of a True Journey

Part 2


Part

2 G

loba

l Bio

tech

Lea

der:

The

Sta

rt o

f a

Tru

e Jo

urne

y

Korea did not take part in the international genome project that started in 1990. It fell behind in the competition for genome sequencing. Yet it has made considerable achievements and progress in the “personal genomics era.” That was largely due to Macrogen’s efforts to pioneer and secure technologies and information in the field of genomic analysis through joint research with the GMI-SNU (Genomic Medicine Institute of Seoul National University) starting from its early stages.

The fact that one of its research papers was published in the world-famous scientific journal Nature means that the company no longer has to plead with potential global customers to trust it. Showing the journal publication is far more effective than saying a thousand words in an in-person meeting. A research paper published in Nature is a testament to Macrogen’s credentials and further solidifies its standing.

In addition to Nature, Macrogen continues to publish the results of its joint research with the GMI-SNU in world-renowned journals.

The research results and achievements that have driven the growth of Macrogen include the following:

Completion of the Korean BAC Clone MapAs of June 2001, Macrogen succeeded in completing the Korean

BAC Clone Map after securing a total of 96,768 Korean DNA fragments

Human Genome Project: The Future of Precision Medicine

Section 1_1


through a bacterial artificial chromosome (BAC) and matching them to the publicly released human genome map at a rate of one to one. A map produced through a BAC follows the same approaches taken by those who worked for the Human Genome Project, an international scientific research project.

In this research, which targeted Koreans for the first time, Macrogen concentrated on SNP analysis while seeking to identify the functions of 1,500 genes related to the most critical diseases. The research results garnered close attention for its contributions to establishing the framework for more rigorous genome research on Koreans.

To make the map, Macrogen extracted DNA from the sperm of a Korean man in his 20s and cut it into roughly 100,000 pieces, analyzed 500 sequences at the end of these pieces, and then compared the pieces with the human genome map through bioinformatics. After cutting a Korean person’s DNA into 100,000 pieces, Macrogen identified some sequences from each piece and figured out which part of the human genome map the pieces corresponded with.

With the Korean BAC Clone Map and 4,000 BAC clones, Macrogen developed the one megabyte-resolution “MacArray Karyo 4000” that could detect quantitative and qualitative chromosomal disorders. Macrogen also completed the development of the FISH (fluorescence in situ hybridization) probe that could diagnose major oncogenes.

Implementation of the Northeast Asian Genome Project Macrogen successfully implemented the Northeast Asian Genome

Sect

ion

1_1

Hum

an G

enom

e Pr

ojec

t:

The

Fut

ure

of P

reci

sion

Med

icin

e

Project in Mongolia, from 2003 to 2009, in a bid to secure genetic information and content unique to Asians in partnership with the GMI-SNU under the aegis of the Mongolian government.

Mongolia has more than 10 isolated clans of about 2,000 members each. The clans did not interact with one another, either, for a very long time. Therefore, researchers were able to find relatively easily which genes were susceptible to diseases through gene comparison between healthy members and ill members within a clan. The genetic analysis of Mongolian minority clans was also expected to be instrumental in figuring out Koreans’ disease mechanisms. Genetically Mongolians and Koreans are similar to the extent that many believe that the two were the same people until 7,000 years ago, which is backed up by an overall comparison of the two groups gene maps.

A total of USD 5 million (including USD 830 thousand from the private sector) was put forth by the Ministry of Science and Technology over five years for the project officially entitled the Functional Genome Project for Northeast Asian Populations.

Whole-Genome Sequencing for a Korean Individual In July 2009, Macrogen completed a full genome sequence of an

individual, the fourth time this was done in the world, and published the results in Nature under the title “A highly annotated whole-genome sequence of a Korean individual.”

The paper contained Macrogen’s research results regarding the complete genome sequencing of an individual, designated an Altaic Korean 1 (AK1), which was completed in September 2008. Korea became

Part

2 G

loba

l Bio

tech

Lea

der:

The

Sta

rt o

f a

Tru

e Jo

urne

y


A research paper on the completion of the Asian CNV (Copy Number Variation) Map

published in Nature Genetics in April 2010

The Asian Genome Center launched at the Genomic Medicine Institute

Sect

ion

1_1

Hum

an G

enom

e Pr

ojec

t:

The

Fut

ure

of P

reci

sion

Med

icin

e

the fourth country to publish the results of an individual’s whole-genome sequencing in Nature, after the United States, the United Kingdom, and China. The research however was the first in the world to have been conducted on a Northern Altaian. The previous three studies were all conducted in 2008 on Dr. James Dewey Watson (a European man), an anonymous Han Chinese man, and an anonymous African man.

With Macrogen’s success in the genomic sequencing of an Altaic Korean,the world gained genomic information on the world’s four major races,enabling researchers to conduct research on the unique genetic characteristics of Koreans in addition to genetic base variations common to everyone in the human species. Korea was not able to participate in the Human Genome Project, but Macrogen’s success in the whole genome sequencing of an individual was considered a great achievement, restoring the country’s prestige in the field.

The research was launched in October 2007. Interim reporting was finished in May 2008 at the Korea Medical Association’s 100th-anniversary seminar. In November of the same year, the completion of the sequencing was announced at the Korea Health Forum. Following additional analysis and verification, the research results were published in Nature in July 2009. In March 2009, Macrogen completed its full genome sequencing for a Korean woman, followed by its success in the complete sequencing for a Korean man, securing the genetic information of Korean men and women for the first time.

Through this research, Macrogen succeeded in being the first to extend the base length that could be read at one time to 106. Furthermore, to eliminate the uncertainty involved with existing whole-genome


sequencing technology, Macrogen applied the targeted sequencing technology using BAC clones and high-resolution DNA chip analysis technologies that were designed to determine copy number variation (CNV).

Macrogen discovered that the number of cases in which a single base could trigger a mutation amounted to 3.45 million out of 3 billion base sequences in a man’s body. Most notably, SNP triggering variation, even in protein critical to human survival, through the generation of hormones, among other things, numbered at 10,162, which indicated that seemingly healthy people could have a large degree of variation in their genes and protein, making them susceptible to particular diseases.

Macrogen researchers said, “While sequencing has been done 10-30 times for a genome previously, this research carried it out up to 10,000 times in order to boost the accuracy of genome sequencing.” They added, “We further enhanced the completeness and credibility of our research results passing through Nature’s strict research paper evaluation process for four months. That not only helped us proceed with the GenomeAsia 100K Project successfully but also enabled us to make strides in achieving our company’s goal of establishing a Northeast Asian Bio Hub in Korea.”

The research results proved to be a boost for personalized medicine services for Koreans. Korean researchers used the results of the American genome sequencing for their research, suffering difficulties stemming from the fact that racial genome differences resulted in pharmaceutical efficacy differences. Macrogen’s research not only improved the precision of base sequencing outcomes to the extent that they could be used for personalized medicine service but also provided

a program whereby the clinical significance of the genome sequencing results could be interpreted automatically, allowing individuals and physicians access to a much-needed tool for using genome analysis results easily. The research was all the more important in this regard.

Promotion of the Asian Genome Road ProjectAt the beginning of 2010, Macrogen launched the Asian Genome

Project which was jointly promoted by the Genomic Medicine Institute and the Chosun Ilbo. It was the first international project aimed at figuring out Asian migration routes and cultural anthropological changes through the genomic analysis of males and females in nine Asian countries and it would help to usher in an era of personalized medicine for Asians. The Macrogen project team planned to analyze a total of 918 people’s genomes in nine countries such as Turkey, Kazakhstan, and Vietnam over the course of a year.

In March of 2010, the company finished genomic analysis for 10 Koreans including, five males and five females, followed by whole genomic analyses for 10 Chinese and Japanese people in April. It was the second biggest human whole genome analysis in the world and the largest in Asia. Attention was being paid to the fact that five Korean females were included in the study because out of fifteen people whose genetic analysis had been completed before, only one was female.

Through the research, Macrogen identified the characteristics of genetic information common to Koreans so that comparisons could be made with the existing genomic information of Africans and Europeans. The company also came up with the Korean Reference Genome (KRG). The Macrogen research team identified more than 3,500 cases

Sect

ion

1_1

Hum

an G

enom

e Pr

ojec

t:

The

Fut

ure

of P

reci

sion

Med

icin

e

Part

2 G

loba

l Bio

tech

Lea

der:

The

Sta

rt o

f a

Tru

e Jo

urne

y


of CNV (Copy-Number Variation) unique to Asians. For the research, the research team developed an ultra-high-resolution DNA chip that could identify up to 24 million cases of genetic variation. Based on the analysis results, the team also created the Ultra-High-Resolution Asian Genomic CNV Map.

The United States argued that the gene mapping completed in 2003 could benefit all of humankind. The Asian genomic analysis was particularly significant in that it proved that different people did have different genomes.

Establishing the standards for Asian genomes was important because Asian genomic information could be the key to developing drugs better suited to Asian people. Amid the ongoing race to map the Asian genome, China was proceeding with a genomic analysis for 99 Chinese people to secure an edge in its claim for the Asian standard while the United States was also expected to turn its attention towards Asia.

In 2008, China claimed that it had secured the Asian reference genome while publishing a single Chinese person’s genomic information in Nature. Macrogen disclosed a Korean person’s genomic information in 2009 through Nature, which was highly praised for its precision. Soon afterward, the company succeeded in assembling 10 Korean peoples’ genomic information.

Macrogen’s research team finished the genetic analysis for 10 Korean people (five men and five women) through the Asian Genome Road Project, established a consensus sequence for Koreans that could replace the western-centric view of genes, and disclosed the results as the

“Korean reference genome” through the Korean Bioinformation Center so that researchers could tap into it freely. The late chairman of Green Cross Corporation donated USD 2 million to Macrogen before he passed away in 2009 as he whole-heartedly thought the research was necessary. Chairman Seo pledged to make the research results public so that anyone could benefit from them. He kept his promise.

Completion of the World’s First Ultra-High-Resolution Asian Geno-mic CNV MapThe research results established through the Asian Genomic Road

Project jointly conducted by Macrogen and the GMI-SNU were published in the online version of Nature Genetics in April 2010 under the title ‘‘Discovery of common Asian copy number variants using integrated high-resolution array CGH and massively parallel DNA sequencing.”

This research was significant because it was the first time that a genomic CNV map that analyzed the quantitative differences of Asians’ individual genomes was completed. It was in 2004 that the concept of a copy number variation was introduced in academic circles. Macrogen’s research results completed a CNV map for Asians for the first time globally. Prior to that, the world’s largest whole genome sequencing had been conducted by Wellcome Trust Sanger Institute of the United Kingdom in 2008 using a total of 40 people, including 20 white and 20 black people, without a single Asian person included in the analysis.

Macrogen’s research drew scientists’ attention because it overcame various technical difficulties and completed a map with 25 times higher resolution, discovered 3,500 CNVs unique to Asians; and came up with a new methodology for finding copy number variations.

Sect

ion

1_1

Hum

an G

enom

e Pr

ojec

t:

The

Fut

ure

of P

reci

sion

Med

icin

e

Part

2 G

loba

l Bio

tech

Lea

der:

The

Sta

rt o

f a

Tru

e Jo

urne

y


The Joint Macrogen and GMI-SNU Research Team compared the variation map prepared by Wellcome Trust Sanger Institute of the UK for Europeans and Africans with their research results to find that only 1,500 variations were common to the two different research results, certifying that Asian genetic variation was significantly different from that of Europeans/Africans.

Even in the same species (humans), some people can have two to three identical genes while another has none. CNVs may increase the risk of various diseases such as Alzheimer's and Parkinson’s. They also make a difference in the efficacy of particular drugs on different people. Although the impact of CNVs was suspected in various aspects including individuals’ response to pharmaceuticals, technical limitations hindered further progress. Therefore, the research results were considered as having laid the foundation for the identification of individuals’ CNVs, in the most efficient way and at the lowest cost, critical for the realization of personalized medicine.

Discovery of Massive RNA Transcriptional Base Modification Non-existent in DNA In July 2011, in its joint research with the GMI-SNU, Macrogen,

discovered the existence of RNA’s own TBM (Transcriptional Base Modification) in large quantities, which could not possibly be detected through existing DNA sequencing.

This discovery had the potential to shatter a central theory in biologywhich stated that “all human genetic information is contained in DNA” and it was disclosed in a paper published in Nature Genetics analyzing 18 Koreans peoples’ DNA and RNA at the same time.

Tapping into the results of the next-generation ultrahigh speed genome sequencing, the paper carried out a simultaneous analysis of the participants’ DNAs and RNAs. What set the research apart from other studies was the fact that it was the largest genomic analysis ever conducted for a single people.

The most important reason the paper drew global attention was the fact that it had taken a step forward and added RNA sequencing to the existing DNA sequencing-centered approach for identifying gene expressions and their functional aspects. Through this, the research determined that DNA sequencing was not transcribed to RNA sequencing in exactly in the same way, but bases changed in the transcription process and therefore variations non-existent in DNA could emerge in RNA in a significant way.

Prior to this research, people believed that the identification of the existence of particular variations through DNA research could determine the characteristics of human beings and the diseases they were suffering from. The research made it clear that variations non-existent in DNA could occur through RNA or variations existent in DNA may not be expressed as RNA, pushing RNA sequencing into the spotlight as a critical element in human genome research.

The research results have been considered as being remarkable in the sense that they completed the largest high-resolution genomic analysis for particular people. The genomes analyzed in high resolution were a large volume not just for Korea but globally as well. By reporting the world’s largest volume of genomic sequencing information, the research provided valuable raw data for genetic research while offering an opportunity for Korean genomic information to be extensively

Sect

ion

1_1

Hum

an G

enom

e Pr

ojec

t:

The

Fut

ure

of P

reci

sion

Med

icin

e

Part

2 G

loba

l Bio

tech

Lea

der:

The

Sta

rt o

f a

Tru

e Jo

urne

y


researched internationally.

Up until then, human genome research was focused on the genomes of three peoples (CEPH Europeans, the Yoruba people of Africa, and Chinese) with Koreans excluded from any research. This research reported Korean genomic information in a large scale, opening the opportunity for more rigorous study on the Korean genome.

The paper also identified more than 9.5 million genomic variations through its analysis of 18 Koreans, and more than 2.2 million of them had never been identified in any previous studies. Given that about 30 million genomic variations in the entirety of humankind had been discovered at that point, the variations identified through the study of 18 Koreans were significant for their volume alone. When genomic analysis was carried out on a single person, it was hard to tell whether any new variations were unique to that particular individual or common to the person’s race or even to the rest of humankind. However, this research was significant in this regard as well because it concentrated on the analysis of the genomes of 18 people from a single ethnic group.

Out of 2.2 million variations, about 1.2 million were identified as being present in at least 10% of the Korean population, which had not been reported in research conducted on other people, implying a close relationship between these variations and Korean genetic characteristics.

Different peoples have their own genetic variations, which they have developed in order to adapt to their traditional living environment. This paper earned recognition thanks to its systematic compilation of Korean genetic variations and evaluation of how they are different from

The paper published in Nature Genetics in July 2011 certifying the fact for the first time that RNA sequencing variations exist on a large scale

A paper entitled “The transcriptional landscape and

mutational profile of lung adenocarcinoma”

published in Genome Research in September 2012

Part

2 G

loba

l Bio

tech

Lea

der:

The

Sta

rt o

f a

Tru

e Jo

urne

y


Europeans’ variations, highlighting the limitations of existing research methodologies used to identify disease-related genes in humans.

Mutational profiling of lung adenocarcinomaIn October 2012, a Korean research group, including Macrogen’s

scientists, became the first in the world to identify genetic variations that cause lung cancer through a genomic analysis of cancer tissues of patients with lung adenocarcinoma. This was expected to lead to not only more precise diagnoses of lung adenocarcinoma, for which the cause was unknown, but also to the development of targeted therapy to eliminate genes causing the disease.

The joint research team, composed of the GMI-SNU (Directed by Prof. Jeong-Sun Seo), Seoul National University Hospital (Prof. Young-Tae Kim of thoracic surgery), and the Catholic University of Korea Seoul St. Mary’s Hospital (Prof. Jin-Hyung Kang of oncology), conducted the analysis of lung adenocarcinoma patients’ cancer tissue 200 times with Macrogen providing critical genomic analysis techniques.

The researchers intensively conducted RNA whole-transcriptome sequencing on 200 Korean people’s lung adenocarcinoma tissues and, notably, with Sample 87, for whom there was no genetic mutation information, they discovered new cancer gene mutations and gene fusions. Over 200 analyses led to the discovery of a total of 43 types of gene fusions drawing attention to newly found genetic mutations that can cause lung cancer. Notably, regarding fusion genes related to growth, the research team discovered 8 kinds of phosphorylase fusion genes in addition to the world-first discovery of KIF5B-RET.

Four types of fusion genes were identified for the first time through this research. In addition, the research team discovered Exon polymorphism of the MET oncogene of three people (1.5%) and confirmed that this patient group actually required customized diagnoses and treatment.

Another research team attempted a large-scale RNA transcriptome analysis regarding cigarette smoking and found out that smoking caused significant genetic mutation. Out of the all the lung adenocarcinoma patients, smokers showed expressed various patterns of growth-related genes in the process of uncontrolled mutation.

That implies that it is important to choose a more careful strategic targeted therapy, through transcriptome analysis since cigarette smoke-induced cancer cells have more complex biological characteristics than non-smoker cancer cells. The research team’s paper was published in the online version of Genome Research, a world-renowned scientific journal in the area of genomics, on October 14, 2012.

All kinds of cancer, including lung cancer, arise out of diverse genetic mutation developed after one’s birth. As such, the selection of a personal-ized cancer treatment is of the utmost importance. This research proved that the discovery of each individual’s cancer genes using next-generation methods of genome sequencing proved valuable in this regard.

Elucidation of the Secret behind the Generation of Pluripotent Stem Cells

On December 10, 2014, the results of joint research between Macrogenand the GMI-SNU were published in Nature Communications under the title “An epigenomic roadmap to induced pluripotency reveals DNA methylation as a reprogramming modulator.” The paper identified for

Sect

ion

1_1

Hum

an G

enom

e Pr

ojec

t:

The

Fut

ure

of P

reci

sion

Med

icin

e

Part

2 G

loba

l Bio

tech

Lea

der:

The

Sta

rt o

f a

Tru

e Jo

urne

y


the first time that DNA demethylation was the key epigenetic switch in the process of cellular reprogramming of somatic cells into induced pluripotent stem cells.

The research team measured the methylation level of each base using the next-generation genomic analysis techniques and identified the fact that changes in pluripotency gene expression were activated by a demethylation switch. Macrogen carried out crucial next-generation genomic sequencing including MethylC-seq, ChIP-seq, and RNASeq required for this kind of epigenomic approach.

The research team also determined that while cellular reprogramming begins with narrow demethylation of the transcription factor binding sites, it requires wide demethylation including tens of thousands of bases in later stages to make cellular reprogramming possible for stem cells. Notably, the research team discovered that unlike normal pluripotent stem cells that demethylates in two stages, the special pluripotent stem cell F-class only undergoes the initial cellular reprogramming stage of demethylation.

The research results were one of the achievements of the inter-national joint research team Project Grandiose, a multinational stem cell research consortium aimed at identifying the mechanism that generates induced pluripotent stem cells. The research results of Project Grandiose. were published in Nature and Nature Communications in a total of five research papers.

For four years, starting in 2010, 47 researchers from four countries, including a research team led by Prof. Andras Nagy of the University

of Toronto; a research team from the GMI-SNU, Korea; and researchers from Australia and the Netherlands, participated in Project Grandiose.

Using next-generation genomic sequencing techniques, the joint international research team of Project Grandiose fully uncovered all molecular mechanisms including transcriptome (Canada & Australia), epigenomes (Korea & Canada), and proteomes (the Netherlands) required for the entire process of cellular reprogramming of induced pluripotent stem cells of somatic cells. In the process, the research team also identified the existence of the F-class pseudo pluripotent stem cell, a new stem cell with the characteristic of pluripotency, though it is not entirely identical to an embryonic stem cell.

The F-class stem cell, a new type of pseudo pluripotent stem cell, has higher production efficiency than previously known induced pluripotent stem cells and thus can be produced in a large quantity within a short period. Therefore, the discovery was expected to be great contributions to accelerating personalized medical treatment for cancer and other various degenerative diseases such as visual impairment, Parkinson’s disease, Alzheimer’s disease, spinal muscular atrophy, stroke, diabetes, blood disorders, and kidney diseases.

Through the research, Macrogen and the GMI-SNU published a paper in Nature Communications and three additional papers together with the Project Grandiose joint international research team. Between 2004 and 2014, Macrogen published a total of nine papers in Nature and its subsidiary journals including research on fatherless mice (Nature) in April 2004; genomic analysis results of Zymomonas mobilis (Nature Biotechnology) in January 2005; Korean genomic analysis results

Sect

ion

1_1

Hum

an G

enom

e Pr

ojec

t:

The

Fut

ure

of P

reci

sion

Med

icin

e

Part

2 G

loba

l Bio

tech

Lea

der:

The

Sta

rt o

f a

Tru

e Jo

urne

y


(Nature) in July 2009; the ultra-high-resolution Asian genomic CNV map (Nature Genetics) in April 2010; and the discovery of a large volume of RNA transcriptional base modifications (Nature Genetics) in July 2011.

Establishment of the Northeast Asian Reference Database, the Biggestin the Region In November 2019, Macrogen and the GMI-SNU joint research team

published Northeast Asian Reference Database (NARD), the largest in the region, on the online version of Genome Medicine.

The database includes whole genome sequencing (WGS) and genetic variation information for a total of 1,779 individuals including 850 Koreans, 384 Mongolians, 396 Japanese, 91 Chinese, and 58 Hongkongese. It is the largest of any such reference database that represents four North-east Asian countries, Korea, Mongolia, Japan, and China. It is also considered to have improved accuracy in the genomic analysis of Northeast Asians more significantly than any other reference database in the world.

The joint research team discovered, for the first time, that the people in the four aforementioned Northeast Asian countries have their own genomic characteristics, through this research. The results of the principal component analysis and the admixture analysis regarding the Northeast Asian reference database indicates that each of the four populations has a different genomic composition with Koreans demonstrating a significantly different genomic composition from that of the other three populations. This implies the necessity of establishing a reference database for the population of each country in addition to the databases for the races of each continent, like the Northeast Asian database. It was a particularly important outcome concerning the fact that is scientifically proved the necessity and significance of a reference database for Koreans.

Sect

ion

1_1

Hum

an G

enom

e Pr

ojec

t:

The

Fut

ure

of P

reci

sion

Med

icin

e

Part

2 B

io R

evol

utio

n, T

he S

tart

of

a Tru

e Jo

urne

y

DATABASE Open Access

NARD: whole-genome reference panel of1779 Northeast Asians improves imputationaccuracy of rare and low-frequency variantsSeong-Keun Yoo1,2†, Chang-Uk Kim2,3†, Hie Lim Kim4,5†, Sungjae Kim2,3†, Jong-Yeon Shin2, Namcheol Kim2,Joshua Sung Woo Yang2, Kwok-Wai Lo6, Belong Cho7, Fumihiko Matsuda8, Stephan C. Schuster5,9,Changhoon Kim2, Jong-Il Kim3,10 and Jeong-Sun Seo1,2,3,10,11*

Abstract

Here, we present the Northeast Asian Reference Database (NARD), including whole-genome sequencing data of1779 individuals from Korea, Mongolia, Japan, China, and Hong Kong. NARD provides the genetic diversity ofKorean (n = 850) and Mongolian (n = 384) ancestries that were not present in the 1000 Genomes Project Phase 3(1KGP3). We combined and re-phased the genotypes from NARD and 1KGP3 to construct a union set ofhaplotypes. This approach established a robust imputation reference panel for Northeast Asians, which yields thegreatest imputation accuracy of rare and low-frequency variants compared with the existing panels. NARDimputation panel is available at https://nard.macrogen.com/.

Keywords: Whole-genome sequencing, Reference panel, Genotype imputation, Northeast Asians, East Asians

BackgroundDuring the past decade, the reference panels withpopulation-scale whole-genome sequencing (WGS) haveenabled the extensive human genetic research [1, 2]. Theyhave played an imperative role in the genetic research,especially for genotype imputation in genome-wide associ-ation studies (GWAS). The most commonly used imput-ation panels were constructed by the 1000 GenomesProject Phase 3 (1KGP3) and Haplotype Reference Consor-tium (HRC) studies, which are publicly available forresearchers. As genotype imputation is an essential step toincrease the power of GWAS in a cost-efficient way, theconfidence of imputed genotypes is the most important. Toimprove the quality of imputation in genetic studies, thelarge-scale population-specific reference panels with deepsequencing coverage are required. Accordingly, several re-search groups have generated large-scale WGS data tobuild their own population-specific reference panels [3–10].

Despite Northeast Asians account for 21.5% of worldwidepopulation (http://www.worldometers.info/world-popula-tion), the majority of genetic studies and reference panelsare biased to European ancestries [11]. There are somepopulation-scale studies for building reference panels ofHan Chinese (CHN), Japanese (JPN), Mongolians (MNG),and Koreans (KOR), but several issues, including public un-availability [6, 10, 12, 13], inadequate sequencing coverage[12, 14], small sample size [10, 15], and restriction to exonicregions [16, 17], need to be resolved for the solid imput-ation reference panel. Therefore, constructing a large-scalewhole-genome reference panel covering the diverse popula-tion groups in Northeast Asia with deep sequencing cover-age is still necessary to allow dense and accurate genotypeimputation for the genetic research in these populations.Here, we describe the Northeast Asian Reference Data-

base (NARD), consisting of 1779 individuals from Korea,Japan, Mongolia, China, and Hong Kong. The goal of thisstudy is to establish a high-quality population-specific ref-erence panel for the genetic studies and precision medi-cine in Northeast Asia without the aforementioned issues.

© The Author(s). 2019 Open Access This article is distributed under the terms of the Creative Commons Attribution 4.0International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution, andreproduction in any medium, provided you give appropriate credit to the original author(s) and the source, provide a link tothe Creative Commons license, and indicate if changes were made. The Creative Commons Public Domain Dedication waiver(http://creativecommons.org/publicdomain/zero/1.0/) applies to the data made available in this article, unless otherwise stated.

* Correspondence: [email protected]†Seong-Keun Yoo, Chang-Uk Kim, Hie Lim Kim and Sungjae Kim contributedequally to this work.1Precision Medicine Center, Seoul National University Bundang Hospital, 172Dolma-ro, Seongnam, Bundang-gu, Gyeonggi-do 13605, Republic of Korea2Precision Medicine Institute, Macrogen Inc., Seongnam, Republic of KoreaFull list of author information is available at the end of the article

Yoo et al. Genome Medicine (2019) 11:64 https://doi.org/10.1186/s13073-019-0677-z

A thesis on the Northeast Asian reference genome database published in Genome Medicine in October 2019

The analysis results of Northeast Asians’ admixture show that there exists a genomic composition frequently observed among Koreans (KOR) which differs from

those of Mongolian (MNG), Japanese (JPN), Chinese (CHB, CHS, CDX), Hongkongese (HKG) and Vietnamese (KHV) people


Sect

ion

1_2

Bui

ldin

g up

Pre

cisi

on M

edic

ine

Following the completion of the Human Genome Project, genome sequencing methods continued to develop and related costs continued to drop. In 2008, Dr. Watson spent USD 663 thousand on genome sequencing over two months. Experts predicted, “Genome sequencing costs will continue to decline to around USD 1,000 in 2014,” forecasting the arrival of the era of $1,000 Genome. In 2012, it took just a day to sequence 3 billion pairs of bases at the cost of USD 2,000 to USD 3,000 due to progress in genomic sequencing machinery and technologies.

A genome map indicates the chances of a person to contract cancer or dementia risk among other illnesses. By looking at a person’s genome map, we can tell which drugs will be the most effective for the person. Because the potential uses of genome mapping in healthcare applications are truly limitless, competition among advanced countries has grown more intense in the field.

In July 2010, together with the GMI-SNU, Macrogen participated in the Illumina Genome Network Program initiated by Illumina, Inc., specializing in the production of sequencing machines.

Illumina’s Genome Network Program was aimed at building a global network based on its next-generation sequencing technologies in order to promote cooperation and share support among partners offering human genome sequencing services.

Building up Precision Medicine Section 1_2


By satisfying all three major prequalification conditions for taking part in the Illumina Genome Network Program early on, Macrogen and the GMI-SNU were the only participants from Asia. The three conditions included the establishment of ample next-generation Illumina sequencing machining infrastructure that could process large volumes of human genome sequencing analyses; the publishing of at least one international thesis in one of the world’s top-tier journals, like Nature, to attest to the applicant’s human genome sequencing analysis capacities; and acquiring the Illumina service certification.

In 2010, Macrogen and the GMI-SNU were equipped with a total of 13 next-generation sequencing machines including the GA (Genome Analyzer) IIx and 10 HiSeq 2000 machines; published the Korean whole-genome sequencing results in Nature in July 2009 and the Asian CNV (Copy Number Variation) Map in Nature Genetics in April 2010.

In April 2009, Macrogen acquired Illumina’s CSP (Certified Service Provider) certificate proving its capacity to provide high-quality services. Thus, the company met all three requirements of Illumina. Through the Illumina Genome Network Program, Macrogen built a consortium with the world’s top institutions and had the opportunity to carry out whole-genome sequencing while setting up a cutting-edge future-oriented medical information system.

Most notably, given that securing genomic information of more than 100,000 people would have cost at least USD 1,000 per person or USD 85 million in total, Macrogen was able to make financial gains while building on its research capabilities by providing paid services and setting up a subject-specific genomic database.

Major institutions carried out their own large-scale human genome projects. International consortium activities, including those of Illumina Genome Network Program, were accelerated. Symbolized by the era of $1,000 Genome, the time for personal genomics began to emerge on the horizon.

Four years later in April 2014, Macrogen executed a contract with Illumina for the world’s first supply of 10 units of its latest next-generation geno-mic analysis systems HiSeq X which enabled Macrogen to lower its genomic analysis cost below the USD 1,000 per person mark based on its functions that were 10 times more effective compared to existing products.

At last, the era of $1,000 Genome had dawned. In March 2014, Illumina,a biotech system manufacturer launched HiSeq X that was capable of completing an individual’s genome sequencing at just USD 1,000 apiece. The start of the era of genome sequencing for $1,000 was expected to not only popularize genome sequencing but also promote more economical and rapid research on precision medicine.

Macrogen became the only commercial service provider in the world to be supplied Illumina HiSeq X. The analysis system would enable a laboratory to complete whole-genome sequencing for tens of thousands of people a year. It enhanced the capabilities of Illumina’s predecessor flagship product HiSeq 2500 by more than 10 times. As a single unit was able to analyze more than 2,500 people’s genomes a year at less than USD 1,000 apiece, the model was optimized for a large-scale genome analysis project.

Sect

ion

1_2

Bui

ldin

g up

Pre

cisi

on M

edic

ine

Part

2 G

loba

l Bio

tech

Lea

der:

The

Sta

rt o

f a

Tru

e Jo

urne

y


The introduction of the system improved Macrogen’s genomic analysis service capacity by over 600%, enabled the company to provide its large-volume human genome analysis service, X-Genome, to researchers around the world, and pursue the Asian 10,000 Genome Project in partnership with the GMI-SNU.

Macrogen continued to expand its equipment infrastructure to help with the launch of clinical diagnosis sequencing services in the domestic market and accelerate the implementation of more precise medicine around the world. In September 2014, Macrogen purchased PacBio RS II from Pacific BioScience, an American genomic analysis platform supplier, to establish the high-quality De Novo Asian Reference Genome required to actualize personalized medicine that was optimized for Asian individuals.

The equipment was optimized for not only the industry’s longest lead analysis functionality and accuracy, but also for the detection

The HiSeq X series supply contract signed between Macrogen and Illumina

of various forms of DNA mutation. As such, it was ideal for de novo sequencing designed to analyze novel genomes where there is no reference sequence available for alignment, and the study of genomes and genomic variations of various organisms including animals, plants, and bacteria.

Through the introduction of this technology, Macrogen was able to analyze complex genomic areas effectively to identify genomic variations besides SNP, and most notably establish the most expansive sequencing service line in the world.

In January 2016, Macrogen purchased DRAGEN Bio-IT Processors from Edico Genome to enhance its big data processing and analysis capabilities for large-volume genomic analysis and clinical genome sequencing.

The processors were installed into Macrogen’s cutting-edge NGS equipment including Illumina’s HiSeq X, HighSeq 2000, HiSeq 2500, HiSeq 4000, and MiSeq; Thermo Fisher Scientific’s Ion PGM and Ion Proton; Roche’s GSFLX; and Pacific BioScience’s PacBio RS II.

Upon the purchase of DRAGEN Bio-IT Processors, Macrogen’s IT infra-structure consisted of a storage capacity of over 18 petabytes with over 3,000 core clusters. Following the processor installation, Macrogen’s analysis speed sharply improved and the company was able to complete genomic analysis within a mere 26 minutes through HiSeq X DNA sequencing while maintaining a high level of responsiveness and accuracy for each genome (30x coverage).

Sect

ion

1_2

Bui

ldin

g up

Pre

cisi

on M

edic

ine

Part

2 G

loba

l Bio

tech

Lea

der:

The

Sta

rt o

f a

Tru

e Jo

urne

y


The processor introduction greatly contributed to the company’s US subsidiary (presently Psomagen) with regards to its gene-based medical services offered to doctors and patients through CLIA-certified (Clinical Laboratory Improvement Amendments) laboratories. It also laid the foundation for the connection of genomic big data obtained through Macrogen’s various projects, such as the Asian Genome Project and the Global Genome Center Network, to its medical information and content business.

Since its listing on the KOSDAQ in 2000, Macrogen has raised capital funding four times. Recognizing its high credit rating, financial stability, and growth potential, Macrogen has been permitted to raise funds through the issuance of bonds with the warrant and convertible bonds at relatively lower costs of raising capital instead of bank loans, which have a higher interest rate. All four times it raised capital, the company did so to secure investment resources, not to overcome financial difficulty.

The first investment was made in 2012 when Macrogen issued bonds with a warranty for USD 13 million. The market considered Macrogen’s corporate bond issuance quite extraordinary as the company was known to have a solid financial structure in the market.

At the end of 2011, Macrogen was seeking to identify new fusion gene mutations causing lung cancer through the genomic analysis of the lung adenocarcinoma tissues of a non-smoker in his 30s to develop new drugs for the relevant targeted genes. It was an attempt to embark on an all-out personalized medicine business based on self-confidence in the company’s genetic analysis technology that it had accumulated for

over 15 years since its founding.

Macrogen aimed at developing new drugs on its own. Genetic analysis services and joining forces with pharmaceutical companies to develop new drugs that were required for the company to achieve its ultimate goal. Licensing out its own active ingredients would prove to be much more lucrative than selling targeted genes to pharmaceutical companies.

The second raising of capital took place in 2014 when Macrogen publicly announced that it has secured USD 25 million in large investment resources through the issuance of convertible bonds with the purposes of expanding its core business and securing new growth engines. Despite a mere 2% YTM (yield to maturity), Macrogen succeeded in attracting investment. The large-scale seeking of investment funding was intended to help the company pursue its mid-to long-term business strategy in line with the changing genomic analysis business environment. Because the company was pioneering the way toward the era of $1,000 Genome, Macrogen needed to upgrade its research and service infrastructure, secure overseas business bases, and enhance competency for its flagship business area.

At the time, the company was building a Macrogen Global Genome Center Network with institutions in Europe, Japan, and Latin America, which it was consulting with about a large-scale joint genomic research program. Macrogen was also planning on setting up a Macrogen Global Precision Medicine Network in a bid to expand its business in the areas of clinical diagnosis and diagnostic. That involved the establishment of genomic analysis centers in major hospitals and medical institutions at

Sect

ion

1_2

Bui

ldin

g up

Pre

cisi

on M

edic

ine

Part

2 G

loba

l Bio

tech

Lea

der:

The

Sta

rt o

f a

Tru

e Jo

urne

y


home and abroad in order to actualize personalized healthcare.

By signing a memorandum of understanding with SNU Bundang Hospital in 2015 and the National Cancer Center, among other organizations, to conduct joint research on precision medicine, Macrogen spurred the growth of its clinical diagnosis R&D related to cancer and rare diseases based on NGS (Next-Generation Sequencing) technologies.

In April 2016, Macrogen signed a memorandum of understanding with the National Cancer Center on cooperation with regards to Joint Research on Precision Medicine based on Genomic Information for Cancer Patients. The two parties agreed to form a TFT designed to conduct joint research on genomic information based diagnosis and treatment of cancer and rare diseases and lay the foundation for the utilization of each party’s genomic and medical information and healthcare information. Furthermore, they reached an agreement on the formation and operation of cohorts for joint research and the way in which they would apply their research results regarding precision medicine services to their clinical practices.

Macrogen’s success in drawing large investments was possible due to the positive reception of its efforts to lay the foundation for sustainable growth by securing a base for stable growth in the genomic analysis market and, based on the results, making inroads into the clinical diagnosis sequencing markets targeting large hospitals and global pharmaceutical companies. Furthermore, success was a reflection of many investors’ trust in Macrogen’s vision: to realize personalized medicine based on genomic information.

Signed an MOU with SNU Bundang Hospital for strategic cooperation

Signed an MOU with National Cancer Center on joint research for precision medicine based on genomic information

Part

2 G

loba

l Bio

tech

Lea

der:

The

Sta

rt o

f a

Tru

e Jo

urne

y


The third capital raising event was organized by the company’s US subsidiary (presently Psomagen, Inc.) established in December 2015, which drew in USD 10 million (approximately USD 9 million) in investments from Capital Portfolio Management LLC., an independent investment advisory firm, using convertible bonds issued by the subsidiary and guaranteed by Macrogen for the same amount.

With these funds, the subsidiary developed new services in the fields of clinical diagnosis and precision medicine in North America while laying the groundwork for sustainable growth independently of the parent company Macrogen within a relatively short period through enhancement of its sales and marketing activities targeting local general hospitals and multinational pharmaceutical companies.

The fourth capital raising was initiated in the same year by MGmed, an affiliated company of Macrogen, to draw in USD 4 million from STIC Investments, a Korean venture capital firm, with a repayment guarantee by Macrogen. The investment decision that was made through a meticulous five-month evaluation process was significant because at the time venture capital financing activity in Korea was greatly slowed down due to uncertainties regarding the Korean economy.

MGmed specializes in molecular diagnosis using DNA chips and genetic analysis technologies such as PCR (polymerase chain reactions). It was developing genetic analysis products that could diagnose various diseases, such as hereditary chromosome disorders, PGD (preimplantation genetic diagnosis), infectious bacteria, and viruses. Using its highly sensitive independent PCR technology, the company was also developing cancer diagnostic kits.

Sect

ion

1_3

Hea

ding

tow

ards

Suc

cess

: G

loca

lizat

ion

Stra

tegy

Right from its start, Macrogen began preparations to make inroads into overseas markets, launched its first international services in 2002, and earned USD 33 million or 59.4% of its total annual sales of USD 56 million from exports in 2016. By consolidated standards, which includes the performance of its overseas subsidiaries, Macrogen earned 70% of its annual revenues in 2016 overseas.

Macrogen was able to expand its global presence so impressively because of its unique approach. By 2005, the field of biotechnology continued to grow worldwide. Large projects relating to genes and genetic analysis kept growing around the world. Macrogen was quick to launch a Glocalization (Globalization + Localization) strategy.

While gradually expanding its headquarters’ reach for international services, Macrogen continued to enlarge its global genome center network so that it could provide customer services to international customers locally in the fastest way possible. Through such an approach, Macrogen has been able to offer its overseas customers faster and more convenient services tailored to their specific needs, which in turn has served as a strong magnet for new customers.

Macrogen’s overseas advance started with the establishment of Macrogen Corp. (presently Psomagen, Inc.) in Rockville, Maryland, of the USA in December 2004. In November 2007, it launched Macrogen Japan Corp., its second overseas service lab, in Tokyo. In June 2008, it opened

Heading towards Success: Glocalization Strategy

Section 1_3

Part

2 G

loba

l Bio

tech

Lea

der:

The

Sta

rt o

f a

Tru

e Jo

urne

y


Psomagen1330 Piccard Drive, Suite 205, Rockville, MD 20850 USATel. : +1-301-251-1007

Macrogen Japan Genome Center 3F,Kyoto University International Science Innovation Building, 36-1 Yoshida-honmachi, Sakyo-ku,Kyoto 606-8501, JapanTel. : +81-75-746-2773

Macrogen Singapore3 Biopolis Drive #05-18, Synapse, Singapore 138623Tel. : +65-6339-0927

Macrogen EuropeMeibergdreef 31, 1105AZ, Amsterdam,The NetherlandsTel. : +31-20-333-7563

its European branch office (incorporated as Macrogen Europe B.V., in 2017) in Amsterdam and began to offer localized genetic and genomic analysis services for customers across the continent in April 2009. In August 2013, Macrogen opened its Oceania branch office in Sydney, Australia followed by the establishment of a subsidiary in Singapore (Macrogen Singapore Pte. Ltd.) in November 2016 and the opening of a branch office in Spain in December 2016.

As a result, Macrogen has secured clients that include approximately 18,000 researchers and research institutions in 153 countries as of 2019. As of 2015, foreign businesses that Macrogen has business relations with numbered 39,896 in Europe (47.4%), 14,623 (17.5%) in Latin America, 13,194 (15.8%) in Asia, 7,244 (8.7%) in the Middle East, 6,422 (7.7%) in Oceania, 1,405 (1.7%) in Africa, and 1,051 (1.4%) in North America.

Macrogen’s overseas clients include almost all the world’s most prestigious universities and research institutions including the National Institutes of Health (NIH); California Institute of Technology (Caltech); Howard Hughes Medical Institute in the United States; The Hospital for Sick Children (HSC) in Canada; the University of Antioquia in Colombia; Hospital Pedro de Elizalde in Argentina; the University of Oxford and the University of Cambridge in the United Kingdom; Leiden University and Plant Research International (PRI) in the Netherlands; the Australian National University (ANU); and the University of Sydney and the University of Western Australia in Australia.

In addition, Macrogen offers genetic and genomic analysis services to biotech researchers working hard in almost all other major countries in the world including China, Japan, Cambodia, Thailand, Malaysia,

Sect

ion

1_3

Hea

ding

tow

ards

Suc

cess

: G

loca

lizat

ion

Stra

tegy


Indonesia, Singapore, and India in Asia; Russia and Eastern European countries like Romania, the Czech Republic, and Hungary; Finland; Turkey; Kenya, South Africa and Gambia in Africa; and Israel, Egypt, Iran, the UAE, and Jordan in the Middle East.

As a result of its global localization strategy, Macrogen was included in the Top 10 Sequencing Companies in the world selected by Genetic Engineering & Biotechnology News (GEN) of the United States according to revenue and analysis capacity for two years in a row between 2018 and 2019. Launched in 1980 in the United States, GEN is one of the world’s most prestigious publications in the area of biotechnology focusing on the latest development in the field, which includes genomics.

GEN carefully looked at genomic sequencing companies across the world that excelled in not only their laboratories but also the clinical environment in the midst of dropping genomic analysis prices and increasing competition in the industry, and included Macrogen in the top 10 list as the only Korean business that won the honor. In 2018, with annual revenue of USD 91 million Macrogen ranked 8th on GEN’s Top 10 Sequencing Companies which included Illumina, Thermo Fisher Scientific, BGI Genomics, Agilent Technologies, PacBio, and Oxford Nanopore Technologies. This was the recognition that Macrogen was a global company equipped with the capacity to compete with international players in the field of genomic analysis, and this fact was proven by the company’s annual revenue in the field.

The success is attributable to the company’s concerted efforts to provide localized genomic analysis services through its global business venues located in seven countries in key locations around the world

in addition to the company’s headquarters in Korea. Macrogen was able to earn its international clients’ trust by precisely identifying and addressing what they really wanted through its global localization strategies. Another contributing factor was the company’s constant upgrades to its analysis infrastructure and capabilities to be able to meet its clients’ new needs. As of 2019, Macrogen was equipped with sequencing facilities capable of analyzing the entire genome of 300,000 people a year and an IT computing system that could safely store and run a total of 30 petabytes of digital information.

Meanwhile, in December 2012, Macrogen signed the “Memorandum of Understanding on Joint Business in the Chinese Diagnostics Market” with Ahn-Gook Pharmaceutical and subsequently launched a G-scanning service, which diagnoses genetically determined disorders in newborns with DNA chips, in China. Under this agreement, Macrogen supplied DNA chips and carried out the analysis for G-scanning services while Ahn-Gook took charge of the sales and marketing of the G-scanning service in China through its Chinese subsidiary.

Sect

ion

1_3

Hea

ding

tow

ards

Suc

cess

: G

loca

lizat

ion

Stra

tegy

Exclusive G-scanning supply contract with Ahn-Gook for Chinese market in September 2012

Part

2 G

loba

l Bio

tech

Lea

der:

The

Sta

rt o

f a

Tru

e Jo

urne

y


At that time China had more than 16 million newborns a year with the four major cities Beijing, Shanghai, Guangzhou, and Tianjin seeing more than 600,000 newborns each a year. Compared to Korea, which has less than 500,000 newborns a year, China was a market with a significantly larger growth potential. Macrogen decided to join hands with Ahn-Gook to make inroads into the Chinese market with the intention to expand its presence much faster through the pharmaceutical company’s existing sales networks across the nation.

Ahn-Gook launched various sales and marketing events in China including a Genomic Scanning Service Academic Seminar in major cities like Beijing, Guangdong, Jiangxi, and Shenzhen with the participation of medical doctors in the fields of pediatrics, neonatology, obstetrics & gynecology, and medical diagnosis. G-scans gained popularity and demand continued to grow.

A faster and more stable service delivery was required. In November 2013, almost two years after Macrogen set up shop in China, Macrogen and Ahn-Gook signed a contract with CapitalBio, a Chinese genomic analysis company, to build a more extensive cooperative network for G-scanning services in the country. Cooperation with the Chinese firm was expected to help expand its market presence by ramping up the delivery of high-quality G-scanning service across the country.

In December 2014, Macrogen signed a supply contract with the Instituteof Psychiatry of King’s College London (KCL) for a large-scale human genomic analysis service, X-genome. After passing KCL’s prequalification evaluation, Macrogen competed with world-renowned genomic analysis service providers and won the contract for its excellent genomic analysis

infrastructure, data analysis capability, service quality, and reliability.

Highly recognized for its quality research in the fields of psychiatry and psychology, KCL’s Institute of Psychiatry is one of the world’s largest research institutes and graduate schools. KCL conducted research to identify genetic causes of schizophrenia for years. It chose Macrogen as an ideal collaborative institution to apply a human genomic analysis approach capable of determining even genetic level structural variations instead of the traditional methods that target particular genes in patients’ samples.

In March 2015, Macrogen signed a contract with University College London (UCL) in the United Kingdom for genomic analysis services including exome sequencing. In cooperation with many countries, like the United States, the United Kingdom, and France, UCL was conducting a project aimed at identifying the genetic causes and risk factors of neurodegenerative diseases such as Alzheimer’s disease, Parkinson’s disease, and frontotemporal dementia.

In September 2014, before the singing of the contract, Macrogen signed a contract with the school’s Molecular Medicine Center for the supply of genomic analysis services after winning a competitive process among prequalified bidders and provided human exome sequencing services for inflammatory bowel disease patient samples that had been secured for the UCL Molecular Medicine Center’s own research. UCL officers who were impressed with Macrogen’s excellent services and analysis capabilities at the time enthusiastically welcomed the selection of Macrogen as a research partner for the ongoing neurodegenerative disease patient research project and committed to promoting close cooperative relations between the two parties.

Se

ctio

n 1_

3 H

eadi

ng t

owar

ds S

ucce

ss:

Glo

caliz

atio

n St

rate

gy

Part

2 G

loba

l Bio

tech

Lea

der:

The

Sta

rt o

f a

Tru

e Jo

urne

y


Participation in the GenomeAsia 100K Initiative At the beginning of 2016, Macrogen announced it was officially

participating in the GenomeAsia 100K Initiative and that Chairman Jeong-Sun Seo would serve as a co-representative. As a non-profit consortium, the massive project was participated in by 12 South Asian countries and seven Northeast Asian counties, to analyze the genomic information of 100,000 Asian people with an investment of USD 100 million over three years.

Non-state participants included research institutes such as Macrogen, the Nanyang Technological University of Singapore, and the GMI-SNU of Korea, as well as numerous businesses such as Illumina of the US and MedGenome of India. The GenomeAsia 100K Initiative was intended to integrate 100,000 genomic analysis results for Asian people into clinical and medical information and present diagnosis and treatment methods for diverse diseases.

Upon completion, the project will be able to secure clinical genetic research results required for the treatment of rare diseases and genetic disorders unique to Asians as well as complex diseases such as cancer, diabetes, heart diseases, eye diseases, and autoimmune diseases.

The ultimate goal is to accelerate the realization of precision medicine by creating 50-100 Asian reference genomes and sharing these research results with the large-scale Western-centered genomic analysis projects including the Precision Medicine Initiative of the USA and the 100,000

Emerging as a Global Leader in the World Bio Market

Section 2_1 Genomes Project run by Genomics England of the UK.

Macrogen has taken charge of genomic data generation and analysis utilizing its next-generation genomic analysis infrastructure secured through the GenomeAsia 100K Project and its accumulated experience in promoting various large-scale projects.

In December 2019, the consortium published its first round Asian geno-mic analysis results in Nature as its cover story. The research is significant in that, it comprises 219 ethnic groups (142 in Asia) from 64 countries worldwide and the Asian genomic data covers the largest number of regions and ethnic groups of any Asian genomic data yet disclosed in the world. hat means that researchers can now build and use Asian genomic databases rather than European genomic databases when conducting disease research for Asians, which is expected to greatly contribute to the realization of precision medicine for Asian people.

The GenomeAsia 100K Initiative will continue its research with conducting a complete genomic analysis for up to 100,000 people from across Asia as its objective and share these outcomes with precision medicine researchers and medical staff around the world.

Completion of the Asian Reference Genome MapGRCh38 completed in the United States in 2003 was used as the

international standard for genome maps. It however reflected the genomic information of white and black people showing limitations with regards to the analysis of Asian people’s unique genetic characteristics. In October 2016, Macrogen succeeded in sequencing Korean reference

Sect

ion

2_1

Em

ergi

ng a

s a

Glo

bal L

eade

r in

the

Wor

ld B

io M

arke

t

Part

2 G

loba

l Bio

tech

Lea

der:

The

Sta

rt o

f a

Tru

e Jo

urne

y


Macrogen published a paper entitled “The Completion of the World’s Most

Accurate Asian Reference Genome Map” in Nature in October 2016

In December 2019, Nature published the research results of the international GenomeAsia 100K consortium as its cover feature

genomic information with a new analysis method. Macrogen completed, for the first time in the world, the laudable achievement of creating a reference genome map for a Korean and an Asian based on a Korean male’s genetic information. The research results were featured in Nature on October 13 through a special thesis entitled “De novo assembly and phasing of a Korean human genome.”

In a press release for global media outlets, Nature evaluated the Korean reference genome map as “nearing perfection,” adding that “It is the first reference genome map centered around a particular race.” It concluded by saying, “It is the most contiguous human genome map.”

Through the research co-promoted with the GMI-SNU, Macrogen filled a gap in sequencing considered incomplete and completed a perfect Korean reference genome map. The new genomic information compiled by Macrogen was expected by many around the world to greatly contribute to accelerating the arrival of the era of precision medicine offering healthcare services tailored for each individual’s genetic features.

Following the announcement of a draft human genome map in 2000, lots of human genome information was interpreted. The problem was that there remained a total of 190 gaps in the existing genome map, indicating limitations in its accuracy. Furthermore, the reference genome widely used for comparison and analysis purposes was mostly from Westerners, leading to criticism that it was insufficient for reflecting racial differences. The Macrogen researcher team identified 105 gaps (55%) of the 190 gaps in the existing human reference genome, produced the most accurate genomic sequencing results in the world, and managed to analyze Korean genomic sequences almost flawlessly.

Sect

ion

2_1

Em

ergi

ng a

s a

Glo

bal L

eade

r in

the

Wor

ld B

io M

arke

t


Through highly accurate Korean reference genomic sequencing, the research team discovered new sequencing information and structure unique to a race. The research showed that racial difference was significant by discovering more than 10,000 absolutely new insertion type variations equivalent to 7.7 million bases. It also determined that 54 structural variations involved gene expression and 137 variations could change protein structures.

Most notably, the team proved that the Korean reference genome was a step ahead of others, technically speaking, by uncovering 800 structural variations common to humankind which were missing in reference genomes due to technical limitations. Moreover, the research team figured out specific Asian structures including POU2F3 and HRASLS2.

The most significant aspects of the research results can be summed up as follows: First, the genome map produced by the Macrogen was technically the most up-to-date and unflawed genome map. Second, it could also serve as a race-specific reference genome. Third, with a new technique called “phasing”, it was able to divide sequenced information into maternally and paternally inherited DNA.

Behind the highest accuracy of the Korean reference genomic map was various cutting-edge techniques. Examples include “long-read sequencing” that is capable of processing 100 times longer bases at a time compared to existing techniques in addition to the “de novo assembly” method algorithm that combines base information without referring to existing reference genome maps.

Macrogen’s Korean reference genome map was a completely new

genome map with no previous reference genomes of its kind. Prior to that, a genome map was made using a method which cut DNA strands into 150 base pairs and analyzed them separately before combining the results together. That method took a staggering four years to complete a new genome map. In 2010, an attempt was made to create a completely new Asian genome map, but this attempt was forsaken halfway through.

Things changed in August 2014 when long-read sequencing emerged, and it was capable of processing 15,000 pairs at a time. It was this method that Macrogen used to shorten the sequencing time from four years to three months. In October 2014, Macrogen embarked on the task of preparing a completely new Korean genome map and repeated the entire sequencing process 100 times to maximize its accuracy.

Using the “de novo” methodology also proved significant. Previously an individual’s genome sequencing had to be based on existing reference genomes. Then researchers had to cut DNA strands for sequencing and analyze numerous information pieces against reference genomes to put an individual’s genomic information.

The problem was that if an individual had genomic information absent in reference genomes, then that information had to be discarded. Therefore, using the existing reference genomes centered around Westerners to interpret Asian people’s genetic information involved a lot of discarding valuable information.

As such, more appropriate Asian reference genomes were required for the genomic analysis of the Asian population. To create a new reference

Sect

ion

2_1

Em

ergi

ng a

s a

Glo

bal L

eade

r in

the

Wor

ld B

io M

arke

t

Part

2 G

loba

l Bio

tech

Lea

der:

The

Sta

rt o

f a

Tru

e Jo

urne

y


genome, researchers had to start from square one, disregarding existing reference genomes. The technique was named “de novo” (Latin literally meaning “anew”) because a completely new thing had to be produced without any reference or even an outline.

Macrogen’s other strength was its use of a new technique called BAC (Bacterial Artificial Chromosome) that is used for the Korean reference genome sequencing. With this technique, researchers cut DNA into 10,000 bases (100Kb) to produce 100,000 pieces, put them into relevant bacteria vectors, and identified the location of each of the bases. This BAC Clone technique could be used to distinguish maternally and paternally inherited DNA.

This phasing technique has made it possible to distinguish DNA inherited from one’s parents, which was impossible with previous techniques. It was particularly useful in identifying the type of HLA (human leukocyte antigen) needed for organ transplantations which remained an obstacle in the identification of genomic information inherited from one’s parents. That made it easier to find appropriate organ donors through genomic analysis. As such, the phasing technique based genome sequencing is an absolutely necessary resource for precision medicine.

Upon creating a Korean reference genomic map, Macrogen was able to confirm the exact location of genetic variations in genomes and identify genotypes precisely through the realization of phasing by using genomic data that it acquired from Pacific Bioscience’s PACBio RS II and Illumina’s HiSeq, key genomic analysis platforms, in addition to the linked read provided by 10x Genomics and sequencing information offered by BAC Clones.

Sect

ion

2_2

The

$10

0 G

enom

e, E

xpan

ding

the

Rea

ch o

f Pr

ecis

ion

Med

icin

e

The $100 Genome, Expanding the Reach of Precision Medicine

Section 2_2

In March 2017, Macrogen installed NovaSeq 6000, a genomic sequenc-ing system supplied by Illumina of the United States, at the Macrogen Global Genome Center Network. In January of the same year, Illumina introduced the system, predicting the dawn of the “Era of $1,000 Genome” at a JP Morgan Healthcare Conference.

The latest genomic sequencing system NovaSeq 6000 developed by Illumina accounting for 80% of the global genomic sequencing system market was praised as a “dream system.” NovaSeq 6000 shorted the time required for a person’s whole genome sequencing from two weeks to 1-2 days.

Genomic sequencing technology has been developing at an incredible pace. The first human genome project began in 1990 and ended in 2003. An individual’s genomic sequencing took 13 years and USD 3 billion (about KRW 3 trillion). Eight years later in 2011, Steve Jobs received individual genomic testing service for tailored treatment for USD 100,000 (about KRW 100 million). Three years later in 2014 when Illumina’s HiSeq X was launched, an individuals’ whole genome sequencing took two weeks with USD 1,000. Three years after that in 2017, Illumina’s NovaSeq 6000 emerged and the era of $100 Genome.

The NovaSeq 6000 can complete up to six tera base pairs (Tb) reads of whole genome sequencing for roughly 60 people within two days, approximately five times faster than HiSeq X.

Part

2 G

loba

l Bio

tech

Lea

der:

The

Sta

rt o

f a

Tru

e Jo

urne

y


Macrogen’s cutting-edge genome sequencing system, NovaSeq 6000

Sect

ion

2_2

The

$10

0 G

enom

e, E

xpan

ding

the

Rea

ch o

f Pr

ecis

ion

Med

icin

e

Macrogen was the first in the world to purchase three NovaSeq 6000 systems and the company installed one in its US subsidiary (Psomagen) and two in its Korea headquarters. Following test operations, the NovaSeq 6000 systems began their global service in April 2017. This investment enabled Macrogen to carry out genomic sequencing for about 70,000 people, equivalent to 8,000 tera base pairs, a year starting from the third quarter of 2017, which was the highest in Korea and the fifth highest in the world. As of 2019, Macrogen is equipped with almost entirely the most cutting-edge sequencing systems including 15 NovaSeq 6000 systems with the whole-genome sequencing capacity of 30,000 Tbs for more than 300,000 people a year.

Illumina’s NovaSeq launch heightened expectations for the arrival of the USD 100 Genome Era. Although it will take some time before the USD 100 Genome Era can be realized, Macrogen has some experience ushering in the era of $1,000 Genome and is planning to take the lead in heralding in the USD 100 Genome Era and implementing precision

medicine as well.

The era of $100 Genome will most likely to lead to rapid develop-ments in disease prevention and the disease treatment industry. Genomes contain a deal of information regarding an individual’s physical state and any diseases they have had. When BRCA, dubbed the “Angelina Jolie gene” mutates, the individual is more likely to suffer from breast or ovarian cancer.

Cancer has been a leading cause of death in Korea for 33 years, since record keeping began. According to the statistics released by Statistics Korea in 2015, out of 100,000 Koreans, on average 34.1 people die of lung cancer, followed by 22.2 due to liver cancer, 16.7 due to stomach cancer, and 16.4 due to colorectal cancer.

Macrogen is preparing to provide disease prediction services to the general public as well as to cancer patients through genomic diagnosis. The plan is to diagnose cancer-causing genes and individuals’ genes together and offer customized predictive care for each cancer patient. Macrogen wishes to identify each individual’s genetic health through genomic diagnosis to help cancer patients extend their life or reduce their pain through more appropriate cancer management, although it cannot cure them altogether for now.

Cancer patients would be able to live more humanely and happily if genomic diagnostics were able to make certain that their cancer would not be worse than the suffering caused from chemotherapy while stuck in hospital beds. Macrogen is promoting this project to make a

Part

2 G

loba

l Bio

tech

Lea

der:

The

Sta

rt o

f a

Tru

e Jo

urne

y


Sect

ion

2_2

The

$10

0 G

enom

e, E

xpan

ding

the

Rea

ch o

f Pr

ecis

ion

Med

icin

e

breakthrough and shift the paradigm of cancer treatment from “cure” to “care” through the development of the company’s genome-based diagnostics.

Recently the United States greatly relaxed restrictions on its genetic testing market, boosting hopes for the rapid growth of its individual genomic sequencing service market. In November 2017, the FDA of the United States announced that is would simplify restrictions for businesses engaged in the sales and delivery of genetic health risk (GHR) tests for the general public to evaluate their genetic health risks.

Following the development of genomic technologies and the decline of related costs, the United States saw Direct-to-Consumer (DTC) genomic testing service, which enables people to learn about their disease risks without going to medical institutions, expand for over 10 years. Still, people had to go through hospitals to get genetic testing for serious diseases because of concerns over the precision of GHR tests and the possibility of consumers misinterpreting their test results.

However, the FDA under the Trump administration announced the possibility of relaxing regulations on genomic testing. In April 2017, it permitted 23andMe to expand individuals’ genetic testing to include 10 diseases including Alzheimer’s and Parkinson’s diseases. It was the first time that the FDA approved any DTC-based genetic testing service for disease prediction without going through a medical institution. Four years earlier in 2013, the agency issued a decision rejecting 23andMe’s disease prediction and disease-related genetic testing services.

In June 2016, Korea also permitted DTC-based genetic testing and allowed consumers to use private companies’ genetic testing services without going through medical institutions. However, DTC service was limited to 46 genes related to 12 testing objects such as blood sugar, blood pressure, skin aging, and body mass index, provoking criticism that the service was overly suppressed.

Therefore, the 2017 deregulation by the US government greatly affected not only Korea but the entire world. The global competition began to preoccupy the genetic testing market for the general public.

Based on its world-class technological leadership in the fields of genetics and genome sequencing, Macrogen has continued to increase investment and research into expanding the applications of its genomic information to various areas including clinical diagnosis and consumer markets.

The first attempt was with the launch of the faest™ service, a next-generation prenatal genomic screening service with an accuracy rate of 99.9% developed and offered in cooperation with Hamchun Women’s Clinic, a clinic specialized in the issues of infertility and heredity. This next-generation prenatal genomic screening is also known as non-invasive prenatal screening (NIPS).

The testing extracts the DNAs of an expectant mother and her fetus from her blood and analyze them through an NGS method to identify any quantitative abnormality in chromosomes causing Down syndrome, Edwards syndrome or Patau syndrome. It is drawing keen interest at

Part

2 G

loba

l Bio

tech

Lea

der:

The

Sta

rt o

f a

Tru

e Jo

urne

y


Sect

ion

2_2

The

$10

0 G

enom

e, E

xpan

ding

the

Rea

ch o

f Pr

ecis

ion

Med

icin

e

home and abroad for the simplicity of the test that can be done with an expectant mother’s blood and the safety of the test for both the mother and the fetus while providing the same level of accuracy as the existing amniotic fluid test.

Faest™ stands for a “fetus and embryo screening test.” From the outset, Faest™ was aimed to be used for not only fetus but also embryo and so a clinical test was carried out on diverse samples with the abnormality detected at the beginning of pregnancy. The clinical test was conducted on more than 800 expectant mothers, the largest of any test in the area in Korea. An algorithm was developed following a careful analysis based on the country’s largest number of samples with chromosome disorders. As a result, Macrogen was able to develop the next-generation prenatal genomic screening test guaranteeing the ultimate accuracy with a 100% sensitivity and a 99.9% average specificity (99.9% for Down syndrome, 99.9% for Patau syndrome and 99.9% for Edwards syndrome).

Notably, more than 50% of the clinical trial participants were in early stages of their pregnancies and yet a high degree of test accuracy was ensured even though there was only a small amount of fetus DNA in the mother’s blood. Most existing NIPS services were offered to women in mid-pregnancy stages because tests during early pregnancy were not considered reliable. The development of Faest™, equipped with top-tier testing capacity not only replaced NIPS, which was dependent on foreign service, but it also prevented Korean peoples’ genetic information from being leaked overseas. More importantly, it enabled expectant mothers to secure accurate information during the first trimester of pregnancy, which solved various issues involved

in pregnancy in women with advanced maternal age and assisted expectant mothers wishing to have healthy babies.

Upon launching Faest™, Macrogen hosted the Macrogen Genomics Roadshow 2015 in Singapore and Shanghai to introduce its services to major business partners in Asia. Through active marketing efforts, the company soon started offering services to customers, not only in North America but also in Latin America, through its US laboratory MCL (Macrogen Clinical Laboratory, acquired in December 2015 by the American subsidiary called Psomagen, Inc.) which obtained CLIA (Clinical Laboratory Improvement Amendments) certification in 2012 to conduct clinical diagnosis services in the United States.

In May 2016, Macrogen officially launched the carrier test Famplan™ and the genetic test for newborns, ABOOBA™. Thus, Macrogen was able to begin providing total care solutions so expecting mothers can monitor genetic disease risks from pregnancy to postpartum starting with the company’s next-generation prenatal genomic screening test Faest™ that was launched in November 2015.

Famplan™ stands for a “family plan,” a service that analyzes parents’ genomes to check whether there are any genetic disease carriers and forecast the possibility of their babies having any genetic disorders before they pursue pregnancy. Most genetic disorders are rare. Still, one in four among white people and one in 11 among East Asian people are known to be carriers of these kinds of disorders.

Famplan™, which was the first of this type of service to be introduced

Part

2 G

loba

l Bio

tech

Lea

der:

The

Sta

rt o

f a

Tru

e Jo

urne

y


Sect

ion

2_2

The

$10

0 G

enom

e, E

xpan

ding

the

Rea

ch o

f Pr

ecis

ion

Med

icin

e

to the Korean prenatal genetic testing market, can check the risk level for more than 2,000 genetic disorders to prevent inherited genetic disorders in newborns. The service was offered at the lowest price of any existing test so potential parents could tap into the service quite easily.

ABOOBA™ stands for “about the baby.” The service analyzes the genes of newborns to check for any inherited genetic disorders. Because all the tests utilize cutting-edge, next-generation genome analysis technologies, the service produces analysis results for all known risks that newborns could potentially have.

In December 2015, Macrogen officially launched myPETGENE™, a total care solution for pets which utilizes their genetic information. The service analyzes the genes of various pets, such as dogs, horses, or birds, to check if they carry any genetic disorders, to conduct DNA entity recognition, and determine gender among other things so that pet owners can predict and manage the genetic disorders that their pets may inherit. The service has also prevented pets from being lost or stolen by making identity information available, helping alleviate the increasingly serious social issue of abandoned pets. Customers can ask for the myPETGENE™ service on the website (www.mypetgene.com). After they receive a service kit, they collect a blood sample or oral epithelium cells from their pet and send them back to the company. Test results become available on the website within a week of the arrival of the samples. Upon request, a test certificate can also be issued.

Overseas, it is normal to use the genetic information of pets to issue certificates verifying not only the pets’ identity but also the genetic disorders they have. It has become a custom abroad to make sure that

pets are healthy before they are adopted. myPETGENE™ is contributing to the creation of an advanced culture surrounding care for pets by providing tailored total pet management solutions based on genetic information so that customers can live a healthier life with their pets as valuable members of their family.

In October 2016, Macrogen signed a contract with LG Household & Health Care to establish a joint venture intended for them to join forces to enter the consumer genomics market and they launched MiGenstory with starting capital of USD 5 million invested at a ratio of 50:50 between the two companies. The joint venture was intended to more actively pursue inroads into the genetic testing market that is expected to continue growing as a direct-to-consumer (DTC) service.

In June 2016, Korea’s Ministry of Health and Welfare permitted genetic analysis businesses to conduct genetic tests on 12 items including blood sugar, blood pressure, skin aging, cholesterol, and hair loss without needing to go through medical institutions according to the amended Bioethics and Safety Act. This has provided more opportunities to improve the management of general public health enabling lifestyle improvements that utilizes the genetic information of individuals that has been acquired through DTC-based genetic test services. Yet that amendment did not lead to market vitalization due to various limitations in the number of test items, the information available to customers, and consumer access among other factors.

To get over such restraints, Macrogen and LG combined their tech-nologies and marketing capabilities in this joint venture and prepared to launch diverse genetic testing services for the beauty industry,

Part

2 G

loba

l Bio

tech

Lea

der:

The

Sta

rt o

f a

Tru

e Jo

urne

y


Sect

ion

2_2

The

$10

0 G

enom

e, E

xpan

ding

the

Rea

ch o

f Pr

ecis

ion

Med

icin

e

including skin and hair care, and also for gene-based health and lifestyle management for the general public.

Other than these efforts to expand the domestic market for DTC-based genetic testing, the JV partners decided to advance, together, into overseas developed and emerging markets in order to maximize their synergies while simultaneously building on their technological expertise in the field through the collection and analysis of individuals’ genetic and lifestyle information that could potentially lead to the creation of valuable big data.

Tapping into LG’s door-to-door sales networks and marketing channels, MiGenstory began conducting questionnaire surveys asking potential customers about the condition of their skin, scalp, and hair. Macrogen offered customers accurate genetic testing services in the swiftest way possible by utilizing cutting-edge genome sequencing technologies and service capabilities that it has developed over the years. As a result, the company successfully established 60,000 phenotype-genotype matching data points by June 2019 while also significantly improving consumer access to genetic testing.

Using the data MiGenstory developed programs that could reco-mmend the most appropriate cosmetics and health functional food for customers, which LG Household & Health Care applied to their marketing efforts. It has served as a model for professional and differentiated cosmetic and gene-based healthcare services.

The high-quality data MiGenstory has compiled has been highly

useful in the cosmetics and health functional food industries because it matches phenotype and genotype data related to the skin, scalp, and hair of individuals. However, since the data was compiled in a DTC service environment limited to 12 items, its usability in clinical situations was relatively low. It was predicted at the time of the J/V establishment that in two years, the DTC testing would be expanded but the relaxation of DTC-related regulations progressed too slowly resulting in extremely limited utilization of the accumulated data. It could only be used for things like skincare.

As such, in July 2019, Macrogen sold its portion (10,000 shares) of the joint venture established with LG Household & Health Care at the end of 2016 to MiGenstory for USD 4 million realizing a profit of USD 1 million over three years, before exiting the business. It was Macrogen’s first major success in the business of creating genetic analysis data. Following the exit from MiGenstory, Macrogen focused more resources on the individual genetic analysis service that it was providing on its own.

In July 2017, Macrogen launched My Genomestory™ to offer genetic testing services for up to 30 types of diseases, including major forms of cancer. My Genomestory™, a genetic analysis service brand for individuals that was developed and launched by Macrogen, provides information on disease risk factors and offers lifestyle guidance to customers based on the results of individual genetic analysis. The personalized healthcare service helps customers implement their health management and disease prevention more effectively.

My Genomestory™ presents the results of genetic analysis in the most convenient manner using the concept of “health weather” so that

Part

2 G

loba

l Bio

tech

Lea

der:

The

Sta

rt o

f a

Tru

e Jo

urne

y


Launched the carrier test Famplan™ and the genetic test for newborns ABOOBA™ in May 2016

Launched myPETGENE™, a genetic information based total care solution for pets in December 2015

Launched My Genomestory™, a brand for individual genome analysis in July 2017

anyone can easily follow along with the seemingly complex explanations. In addition to the delivery of analysis results, the service ensures that customers can engage in health management more proactively by utilizing a self-diagnostic checklist, preventing disease through diet, exercising, making lifestyle adjustments, and writing a health diary for self-motivation.

The services offered by My Genomestory™ can be divided into two categories: One is disease prediction and genetic wellness testing available through hospitals and medical checkup centers. The other is the DTC-based health & beauty genetic testing that individuals can use directly.

The first service consists of three different types of services referred to as “Blue,” “Green,” and “Gold” services. The “Blue” service measures health and disease risk factors to help customers shift their focus from finding a cure to finding care. The “Green” service checks the level of customer wellness, including their performance in exercises and the quality of their skincare and nutrition outside of the regular treatment of any disease they are suffering from to enhance customer health. The “Gold” service is a combination of the Blue and Green services. Macrogen currently provides disease prediction & wellness genetic testing services in collaboration with 30 major medical institutions in Korea, including the Korea Association of Health Promotion, Kangbuk Samsung Hospital, and Myongji Hospital.

The second category of services is DTC services that customers can ask directly. This category of services includes a service called “the Plus” which offers a genetic analysis report for approximately 46 types

Part

2 G

loba

l Bio

tech

Lea

der:

The

Sta

rt o

f a

Tru

e Jo

urne

y


Sect

ion

2_2

The

$10

0 G

enom

e, E

xpan

ding

the

Rea

ch o

f Pr

ecis

ion

Med

icin

e

of genes in 12 groups for which testing is allowed in the country. The Plus helps those who have not been able to achieve satisfactory results in terms of their skincare, hair loss, or general health management by setting up plans tailored to their genetic information.

Macrogen provides customers with “the Plus,” a DTC genetic testing service, through Naver Shopping, and the service recommends various healthcare companies that Macrogen has allied with. The healthcare recommended healthcare services include healthcare solutions that not only provide genetic analysis results but also take a more direct role in health management. The most iconic of these services include DNA-based diets, tailored exercise routines, customized hair loss management, and optimal vitamin recommendations.

The individual genetic analysis service is a technical breakthrough that can analyze a wide range of information including not only individuals own genetic characteristics but also the level of risk for contracting rare diseases, sensitivity to particular drugs, and hereditary disease risk factors. This service is growing in relevance. Macrogen has taken a significant step forward given the extremely high growth potential of the personalized precision medicine industry, by providing customers with information related to genetic diseases.

In April 2019, Macrogen launched MICROBE & ME, gastrointestinal microbiota analysis service which can be considered individual genetic analysis service 2.0. The microbes of the intestine determine not only the health of the digestive system but also the balance of the immune system. Gut microbiomes are known to play a critical role in a person’s overall health affecting the individual’s weight, psychological health,

nervous system, and metabolism. MICROBE & ME was launched to utilize these functions of intestinal microbes. The identification of the types of fecal microorganisms and their distribution can serve as a barometer of a person’s health.

The environment for intestinal microbes differs depending on a person’s external environment such as their dietary habits and lifestyles. MICROBE & ME looks into the status of an individual’s health and how it is affected by environmental factors. The service not only examines the current status and suggests improvements to make but also monitors positive changes brought about by health management.

Macrogen developed the service with a reference to the high quality data accumulated from roughly 2,000 Korean people through joint research projects conducted with medical institutions. The company is the most competitive in terms of analyzing Korean people’s intestinal microbes.

Part

2 G

loba

l Bio

tech

Lea

der:

The

Sta

rt o

f a

Tru

e Jo

urne

y


“Breakfast Day” is the employee benefits program unique to Macrogen

The 19th Management Innovation Conference held at the head office auditorium in February 2015

Setting up a Creative Corporate Culture

Section 2_3

Macrogen received managerial consultation services in 2010 and 2011. In January 2012, at the 17th Macrogen Management Strategy Conference, the company declared 2012 the first year of Six Sigma (6σ) innovation activities centered on 3Ps (Product, Process, People). In February, manage-ment held a management innovation preparation meeting and finalized the Macrogen Mid-to Long-Term Management Innovation Roadmap. Since then, Macrogen has held management innovation meetings every month and appointed a management leader for the month from those in the position of team leader or higher as part of its sweeping, bottom-up effort to continue bolstering the foundations of the company for managerial innovation.

The company has consistently promoted 3P-focused 6σ management innovation activities, identified various management innovation challenges through that effort, and shared solutions through the Macrogen Management Innovation Conference held at the end of each year. By posting the challenges on the in-house groupware, Macrogen ensures that its staff not only share their management innovation expertise and experience but also present new ideas about how to solve its pressing managerial innovation challenges.

In 2013, Macrogen changed its innovation pioneer system so its junior managers, instead of team leaders, could lead the innovation taskforce teams, as the next generation of leaders, and grow into valuable human resources that would continue to play a key role in companywide

Part

2 G

loba

l Bio

tech

Lea

der:

The

Sta

rt o

f a

Tru

e Jo

urne

y


innovation campaigns. Macrogen has also conducted campaigns designed to energize the organization’s culture, including “Let’s clean up!” an activity held every Friday by all executives and staff to tidy up their offices and laboratories, and “Breakfast Day” where free breakfast is provided to all management once a month.

In 2015, Macrogen received an evaluation of its management innovation outcomes from Corporate Consulting Team, SME Strategy Division, and Woori Bank because it received funding from the government’s Specialized Global Company Candidate Support Project. The evaluation results of the Macrogen Management Innovation System Diagnosis Project indicate that through the five-year management innovation activities of the company, Macrogen considered as having begun the “third task implementation stage” according to the roadmap for innovation promotion stages (Stage 1: Beginning, Stage 2: Organization, Stage 3: Implementation, Stage 4: Expansion, Stage 5: Institutionalization, Stage 6: Stabilization).

Macrogen was urged to take the following actions as new directions for its innovation promotion strategies: (1) Enhance innovation leadership by middle managers, (2) Clarify innovation goals, (3) Select and concentrate companywide management tasks and indexes, (4) Enhance the innovation control tower’s functionality, and (5) Introduce the custom Macrogen innovation promotion system. The company reflected these strategic directions in its 2016 annual management innovation promotion plan.

Most notably, Macrogen had all its executives and staff learn about Kyocera's Amoeba Management throughout 2016 in order to strengthen

the innovation leadership of its middle managers. Amoeba Management is a management innovation plan advocated by the Kyocera Group’s founder Kazuo Inamori, one of Japan's most respected businessmen. His amoeba management led to the stabilization of JAL (Japan Airlines), which had been on the verge of bankruptcy, in just two years after he took over, so the management system has gained traction across the world.

He presented the three major management goals to be pursued by amoeba management. They are (1) Realize physical and psychological happiness for employees and contribute to the development of society, (2) Develop leaders with managerial awareness, and (3) Management by all.

An amoeba is a single-celled organism, and amoeba management refers to each unit of a self-supporting accounting system. The entire business is divided into two levels, divisions and units—each of which is run independently. Their accounting is double-checked by two accountants, or two accounting units. Focus is placed on employee outcomes. Long-term performance is favored over short-term results. Each employee’s approach to work is emphasized.

By learning from the principles of amoeba management, Macrogen established its own Macrogen Amoeba Management System centered around “amoeba leaders” in order to further strengthen its existing management innovation system. While carrying out corporate restructuring in 2016, Macrogen set the following as the three key directions: (1) Lay the foundation for leadership in precision medicine, (2) Establish a responsible management system centered on a

Sect

ion

2_3

Set

ting

up

a C

reat

ive

Cor

pora

te C

ultu

re

Part

2 G

loba

l Bio

tech

Lea

der:

The

Sta

rt o

f a

Tru

e Jo

urne

y


self-supporting accounting system, and (3) Strengthen the global management system.

To lay the groundwork for leadership in precision medicine, Macrogen launched two research divisions for its Precision Medicine Center: the core technology research division and the product development research division. The latter division set up the NGS Clinical Product Development Department as an R&BD (Research & Business Development) unit, which leads not only R&D but also commercialization efforts, in order to make progress in clinical diagnosis sequencing and molecular diagnosis services and expand into the smart healthcare business ahead of the competition.

Macrogen’s Genome Research Center and BI Research Center, which are carrying out core technology research tasks, joined forces with medical institutions to carry out clinical research activities related to precision medicine while also building databases through the GenomeAsia 100K Project. To set up a responsible management system centered on a self-supporting accounting system, Macrogen has continued to promote the establishment of a companywide profit-driven business management system since 2012. To strengthen the global management system, Macrogen has been building up the management systems of overseas subsidiaries and branch offices to the level of its head office, and therefore setting up an integrated risk management system. The company has also applied ISO 9001:2015 quality management systems to the subsidiaries and branch offices as well.

Importantly, to minimize problems between the head office and

subsidiaries and branch offices following the establishment of an independent management system at subsidiary level, Macrogen established the NGS Global Marketing Division that controls sales activities for large projects group-wide and coordinates marketing activities after collecting information on the demands in each market worldwide.

From the outset, Macrogen has attempted to adopt various types of performance management system. In 2008 when the company began to turn a profit, upper management decided to use 10% of the company’s profits as resources for the year as performance compensation. The company developed its own key performance indicators (KPIs) and started to apply them in 2015 with three main objectives: (1) Enhance the performance-centered organizational culture based on differentiated compensation for high-performance units and individuals, (2) Intensify the organizational culture that promotes inter-departmental and companywide communications, and (3) Lay the foundation for an employee compensation (pay and promotion) system based on a performance evaluation system.

In 2010, Macrogen launched the employee’s stock ownership system with part of its year-end bonus resources distributed as shares. In 2012, chairman Jeong-Sun Seo donated 10,000 shares and 40,000 pre-emption rights to the stock ownership association, reinvigorating the operations of the organization.

In 2012 and 2015, Macrogen was certified as the “Best HRD” organization by four government agencies including the Ministry of Employment and Labor; the Ministry of Education, Science, and

Sect

ion

2_3

Set

ting

up

a C

reat

ive

Cor

pora

te C

ultu

re

Part

2 G

loba

l Bio

tech

Lea

der:

The

Sta

rt o

f a

Tru

e Jo

urne

y


Technology; the Ministry of Knowledge Economy, and Small and Medium Business Administration.

Macrogen has implemented various employee-friendly programs such as providing condolences/congratulations leave and pay, support for in-house clubs, and introducing Family Day in a bid to boost employee satisfaction based on the top management’s keen interests and strong commitment to implementing family-friendly management policies. In addition, Macrogen hosted companywide celebrations for the Corporate Anniversary (June) and Macrogen Hiking Day (October) in a bid to promote community spirit amongst executives and staff.

On the anniversary of the company’s founding, Macrogen not only rewards long-term employees but also presents the Macrogen Awards to those that have excelled in realizing the company’s core values. Furthermore, Macrogen has taken the lead in creating a woman-friendly workplace by initiating various programs intended to promote a work-life balance such as paid parental leave and flexible working hours for moms. As a result, Macrogen reached a female to male employee ratio of 53% in 2019 with 87% of female employees choosing to return to work after

For the past three years, 78% of Macrogen’s new recruits have been young people with the ratio of young people continuing to rise. The company has increased the hiring of graduates from specialized high schools, and it has proactively participated the government's Tomorrow Mutual Aid Program for Young Employees as part of the jobs for youth initiative for their long-term employment as well as job satisfaction.

In recognition of these efforts, Macrogen has won multiple government honors related to job creation and working condition improvements, including work-life balance, including the designation of the company as an Excellent Family-Friendly Company by the Ministry of Gender Equality and Family in December 2016; the prime minister’s award at the Government’s Recognition of Contributions to the Labor-Management Culture, hosted by the Ministry of the Interior and Safety, in December 2017; selection as a Youth-Friendly Small But Robust Company by the Ministry of Employment and Labor, in December 2017; and designation as an Excellent HRD Institution by the Human Resources Development Service of Korea, in September 2018. In July 2019, Macrogen was selected as one of Korea’s Top-100 Companies for the category of “job creation” by the Ministry of Employment and Labor on the basis of the ministry’s following criteria, with additional considerations about balance between industries and companies: (1) job creation, (2) youth employment, (3) considerations for women, disabled people, and seniors, (4) rate of temporary employee conversion to permanent employee, (5) work-life balance, and (6) reduced hours without pay cuts.

Macrogen was particularly highly praised for its contributions to the expansion of employment and the promotion of work-life balance as an exemplary domestic biotech company working to realize precision medicine.

In May 2019, Macrogen was selected as a Good Company 2019 by Sisa Journal, one of the major weekly news magazines in Korea, which annually honors socially desirable companies in Korea that meet its selection criteria: “businesses that contribute to the health of their

Sect

ion

2_3

Set

ting

up

a C

reat

ive

Cor

pora

te C

ultu

re

Part

2 G

loba

l Bio

tech

Lea

der:

The

Sta

rt o

f a

Tru

e Jo

urne

y


internal and external stakeholders and pursue sustainable corporate development through the maximization of economic, social, and ethical values.”

In the private sector, Macrogen received 68.58 points in the Good Company Index (GCI) and ranked 31st amongst the country’s numerous big and small companies. Notably, Macrogen received 9.86 points, near the perfect score, in the area of economic value. The score was the highest of the 257 leading companies in the KOSPI and KOSDAQ markets. Right behind Macrogen was Samsung SDI (9.49 points), Korea Aerospace Industries (8.98 points), and Hotel Shilla (8.46 points). The selection as a Good Company 2019 is very significant as the most recent recognition of the company’s economic, social, and ethical values.

At the 10th KOSDAQ Grand Awards ceremony in June 2018, Macrogen won the Top-of-the-Line Management Transparency Award from the chairman of the Financial Supervisory Service for the first time for any company in the genomic analysis industry. The company was recognized for its earnest effort to accomplish outstanding achievements across its entire business sector while also maintaining transparent management and investor protections.

More specifically, the awards are given by the KOSDAQ Listed Com-panies Association to exemplary KOSDAQ-listed companies that excel in terms of their business performance, managerial transparency, technological development, job creation, and social contribution. Launched in 2004, the awards select award recipients through careful document reviews and on-site inspections over a period of around two months by an evaluation committee that is comprised of experts from

various fields.

Other notable recognition from the government of the Republic of Korea include the company’s designation as a potential global specialized company (2014), designation as one of 300 World Class Enterprises (2016), selection as the manufacturer of a world-class product (2016), receipt of the USD 30 Million Export Tower Award (2016), designation as an excellent company in terms of labor-management culture (2017), and the six-year consecutive designation as a KOSDQ Rising Star (2014-2019).

Sect

ion

2_3

Set

ting

up

a C

reat

ive

Cor

pora

te C

ultu

re

Part

2 G

loba

l Bio

tech

Lea

der:

The

Sta

rt o

f a

Tru

e Jo

urne

y


A New Path to Another Leap Forward

Section 2_4

Macrogen has gone through three milestones in its business growth. The first was supplying genetically modified mice, Macrogen’s key business when the company was founded in 1997. The second was the human DNA sequencing business it launched in 2000 and succeeded in expanding overseas in 2002. The third was the creation of the NGS business as its new growth engine that pursues intensive genome research. In October 2016, Macrogen published a paper on “the Completion of the Korean Reference Genome Map” in Nature, gaining a lot of attention from around the world.

Macrogen is now getting ready for the fourth transformation—the global B2C genome analysis service market during the era of precision medicine, which involves changing from being a B2B to a B2C business, marking the point where Macrogen will be taking off again, and setting course for entirely new horizons.

The 21st century can be summed up under three main headings: “globalization,” “technology push,” and “population aging”. The continued growth of the population proportion that is seniors is expected to drive nations to bankruptcy due to spikes in medical expenses. Providing healthcare services for seniors is no longer an option. It has become a necessity unless a nation is willing to declare bankruptcy due to medical expenses. Reducing healthcare costs has emerged as a national challenge to many countries around the world.

The answer to this challenge lies in precision medicine enabling individuals to predict their diseases, improve their lifestyles, and receive preventive treatment regularly. The new paradigm of human health is predicting each individual’s future illnesses through deep learning regarding the healthcare big data compiled from genome information and medical records.

To that end, securing data is more important than anything else: using genomic maps for healthcare necessitates the genomic information of as many people as possible to boost statistical accuracy.

The United States has worked out a national data roadmap to promote its big data policy effectively. The Obama administration announced the Precision Medicine Initiative (PMI) and its plan to invest USD 215 million (about KRW 260 billion) into it. In 2010, the US began to offer 3,224 data sets through (HealthData.gov). It had already launched the Office of the National Coordinator for Health Information (ONC), an exclusive organization for the sharing of healthcare data. In October 2018, the US launched a one-million-person genome project through the implementation of the All of Us Research Program, a key part of its precision medicine plan designed to build a huge cohort.

The United Kingdom established the Health and Social Care Information Centre (HSCIC) in 2013 with a budget of approximately USD 2 billion (about KRW 2 trillion) followed by the founding of Genomic England that was intended to pursue genomic analysis for 10,000 people. The country established “The Power of Information” which promoted the utilization of medical information to improve the level

Sect

ion

2_4

A N

ew P

ath

to A

noth

er L

eap

Forw

ard

Part

2 G

loba

l Bio

tech

Lea

der:

The

Sta

rt o

f a

Tru

e Jo

urne

y


of the national health and the quality of domestic healthcare. This was followed by the establishment of NHS Digital under the Department of Health and Social Care to promote the utilization of big data in healthcare together with amendments to relevant laws so that medical records could be shared, unless specifically opposed by the patients concerned.

While other advanced countries were collecting big data, setting up biobanks, and getting ready to apply this to people’s daily lives, Korea was yet to collect information. In order to warn others about the dire situation, Chairman Seo raised his voice to speak to the government and Korean society for years. Chairman Seo was invited to the “innovative business venture meeting” moderated by the President at the Blue House on February 7, 2019. He was the sole representative of the biotech industry at the meeting that was attended by seven founders of startups worth more than USD 830 million each.

At the meeting, he stressed the need to recognize the importance of the biotech industry and aggressively support the development of the industry. Although AI and robotics were regarded as the key to the biotech industry, he reiterated, the real game changer for the industry was information and therefore the growth of the bio-health industry should be pursued by supporting the generation of knowledge. To that end, chairman Seo proposed concentrating on the following three projects: (1) Training big data experts in biotechnology, (2) The Genome Korean Peninsula 10M Project, and (3) Inter-Korea cooperation in the field of biotechnology.

He placed particular emphasis on the Genome Korean Peninsula 10M Project to be carried out jointly by the public and private sectors for the creation of big data for biotech. He presented specific ways to develop the big data without needing an investment of trillions of Korean won: He proposed including 4 million South Koreans and North Koreans, respectively, in addition to two million other Asians including Chinese people. He said that the government investment in the project would be just USD 125 million in operating expenses over five years, adding that another thing that the government should do is a relaxation of regulations so that the private sector could carry out genome analysis for individuals at low prices.

Chairman Seo said, “We have been a fast follower, but we’ve never been the “first mover” equipped with original technologies to develop new drugs and lead the market. In the biotech industry, Korea has finally grasped the opportunity to lead the global market,” adding, “The biotech industry should not be dealt in predetermined ways that follow protocols.” He also stressed, “The government is hesitant over privacy concerns. American companies will enter the local market to conduct genomic analysis business within the years. The golden window of opportunity for the local genomics industry is the next 3-5 years at the latest.”

Chairman Seo pointed out that should Korea change all its positive regulations into negative regulations, produce 100,000 biotech scientists and its government and the private sector join forces to promote the Genome Korean Peninsula 10M Project, then Korea will be able to benefit greatly in various areas, such as improved health for Korean people, support for humankind’s battle against disease, enhanced

Sect

ion

2_4

A N

ew P

ath

to A

noth

er L

eap

Forw

ard

Part

2 G

loba

l Bio

tech

Lea

der:

The

Sta

rt o

f a

Tru

e Jo

urne

y


financial soundness of the National Health Insurance Service, and global market dominance by new Korean biopharmaceuticals.

At the end of the meeting, Chairman Seo reiterated, “Growth requires smart startups and flexible governments. Ventures need to run their business more transparently while the government should put forward clearer guidelines. Regulations should be changed into relaxed with a future-oriented approach. Wavering may cost the industry its existence itself. Now is the time for the government to take bold action.”

For a long time, Chairman Seo emphasized the need to streamline relevant regulations on DTC genomic analysis so that the biotech industry could tap into big data for industrial purposes. In line with the chairman’s belief, Macrogen applied for the application of a Korean-style regulatory sandbox introduced in 2019 to the company’s DTC-based genetic testing for disease prediction, which has been largely restricted in the country.

The trial of Macrogen’s tailored health promotion service through genomic analysis became the first to pass all the procedures of the domestic regulatory sandbox. On February 11, 2019, Ministry of Trade, Industry and Energy approved the business at the first meeting of the Special Regulatory Exception Commission for Industrial Convergence. As a result, Macrogen secured the opportunity to research and conduct disease-related genetic testing on 2,000 residents of the Incheon Free Economic Zone over two years. The diseases covered in the approval included six chronic diseases (coronary artery disease, atrial fibrillation, high blood pressure, type 2 diabetes, stroke, and osteoarthritis), five

MOU signing ceremony in March 2019 with Microba, an Australian company specializing in gut microbiome analysis

for the global market launching of DTC

Global affiliation agreement signing ceremony in December 2019 with Thermo Fisher Scientific, a U.S-based global biotech company, to accelerate the expansion of the global CES market through the

cultivation of genome supermarkets

Part

2 G

loba

l Bio

tech

Lea

der:

The

Sta

rt o

f a

Tru

e Jo

urne

y


types of cancers (prostate cancer, colorectal cancer, gastric cancer, lung cancer, and liver cancer), and two geriatric diseases (macular degeneration and Parkinson’s disease)

In addition, on May 26, 2019 Macrogen was selected to be a participant in the Pilot Project for DTC Genetic Testing Service Certification that was being promoted by the Ministry of Health and Welfare. The pilot project was designed to pre-check a certification program that the ministry was planning on introducing to improve the overall quality of genetic testing services. Participants in the project were to receive accreditation automatically upon the implementation of the certification system. Because certification would in turn enable the company to be qualified for DTC testing services that were set to be expanded, it was important to Macrogen, and the company did not miss out on the opportunity.

Macrogen took an all-out approach to the deregulation of the DTC business by working hard to expand the list of diseases covered by the regulatory sandbox system being implemented by the Ministry of Trade, Industry and Energy while increasing wellness items through the DTC certification pilot project being hosted by the Ministry of Health and Welfare.

Macrogen is taking the lead in the development of precision medi-cine, including DTC services, intending to help humans live healthier lives. Holding the belief that success follows sincere hope, the company is doing everything it can to move forward despite seemingly insurmountable restrictions. Chairman Seo’s media interview in 2019 very well indicates how strong Macrogen was in its commitment to deregulating the industry.

“What is critical in the era of the Fourth Industrial Revolution is agility. In the past, Korea followed advanced countries’ strategies. Now, to emerge as a first mover, Korea needs to deregulate restrictions hampering its industrial development. The revitalization of Korea’s genomics-related industries means a bright future for the Korean biotech industry.”

- Chairman Seo at an interview with the Asia Business on April 29, 2019

“DTC genetic testing is unarguably the seed that will determine the future of the Korean biotech industry. Korea should relax all related regulations while eliminating the possibility of companies becoming bogged down in “violations.” The empirical prediction of Korean genes prescribes a bright future for the country’s biotech industry.”

- Chairman Seo at an interview with Herald Business on May 8, 2019

“Under its vision of “Hongik Ingan (humanitarianism, to work for the benefit of humankind),” Macrogen always approaches its business with the belief that “The easy pace of a cow will eventually travel a thousand miles” to have precision medicine take root in the country. Opportunities have arrived. Macrogen is ready for challenges. Competition to open the precision medicine era has begun.”

- Chairman Seo at an interview with Digital Times on July 12, 2019

Marking its 22nd anniversary in June 2019, Macrogen began an all-out effort to transform itself into a B2C business under a new corporate strategy that would allow it to boost its prestige as a global corporation by expan-ding the beneficiaries of its genomic analysis service from businesses (B2B) to individual consumers (B2C).

In order to accomplish this, Macrogen has secured a new head office building in Yeoksam-dong, Gangnam, with marketing and

Part

2 G

loba

l Bio

tech

Lea

der:

The

Sta

rt o

f a

Tru

e Jo

urne

y


Marking its 22nd anniversary, Macrogen hassecured its head office on Teheran-ro in Gangnam and is preparing to take off again towards becoming a precision medicine biotech company. Chairman Seo said, “Pursuingonly one goal for the past 22 years, Macrogen has carried out a lot of DNA sequencing and joint research with researchers across the world, serving as a technological partner.Macrogen is now planning to take another step forward and transcend the genomic sequencing market,” adding, “Through the recently purchased Gangnam office building, Macrogen will interact with customers in need of genetic testing and listen to their needs, opening the way for more people to receive the benefits of personalized medicine.”

sales departments who are in direct contact with customers, and the company will start moving to the new head office by the end of 2019. With a location in Gangnam this office can be accessed more easily, Macrogen expects to bring its new products and its business a step closer to its customers at home and abroad.

At the new head office, Macrogen is planning to shift its business management focus from technology to customers while promoting its new business more actively. Based on the technological prowess and expertise that it has accumulated for over 20 years, Macrogen is planning to shift its focus from B2B to B2C business and concentrate on the growth of new customer-based business areas such as microbiome analysis and personal genomics.

At the new location, Macrogen will join forces with cutting-edge health-care companies in various sectors such as beauty, health functional foods, and exercise to make inroads into the B2C wellness business. The Gangnam office will serve as one of the company’s B2C business centers. It will also play the role of being one of the company’s four major global business hubs along with the U.S. subsidiary (Psomagen), the Japanese subsidiary, and the Singapore subsidiary.

Macrogen is also planning to launch commercial DTC genetic testing services in the United States, the key bio-health market, through its US subsidiary Psomagen, Inc. To secure investment resources associated with the US launch of the DTC service, Macrogen is also promoting the listing of Psomagen on the KOSDAQ market. In its technical performance evaluation carried out in July 2019, Psomagen obtained an “A” rating from two professional evaluation institutions, achieving a

major criterion required for KOSDAQ listing.

Chairman Seo said, “Pursuing only one goal for the past 22 years, Macrogen has carried out a lot of DNA sequencing and joint research with researchers across the world, serving as a technological partner. Macrogen is now planning to take another step forward and transcend the genomic sequencing market,” adding, “Through the recently

Part

2 G

loba

l Bio

tech

Lea

der:

The

Sta

rt o

f a

Tru

e Jo

urne

y


Sect

ion

2_4

A N

ew P

ath

to A

noth

er L

eap

Forw

ard

purchased Gangnam office building, Macrogen will interact with customers in need of genetic testing and listen to their needs, opening the way for more people to receive the benefits of personalized medicine.”

In December 2019, the Psomagen-Macrogen consortium acquired the assets of uBiome, the flagship microbiome company of the United States. uBiome equipped with unrivaled competitiveness in the United States in the field of 16S RNA gene sequencing ranks 3rd in terms of its patent portfolio and 1st in the size of its data globally.

By acquiring most of uBiome’s physical assets, including all 246 micro-biome patents, 300,000 microbiome data points and samples, and instru-ments in its San Francisco laboratory, Psomagen immediately secured outstanding competitiveness in the field of microbiomes known as a promising next-generation bio-health industry not only for the US market but the global market as well.

Beyond its existing research projects, Macrogen will continue to expand its business horizons to include clinical diagnosis and personal genome sequencing to take on the mantle of leadership in the personalized medicine era. It will not take long before $100 genome sequencing era arrives around the world or for DTC regulations to be relaxed in Korea. Macrogen’s vision is to grow, in the next five years, into an enterprise admired and trusted around the world for its outstanding disease prevention and wellness genetic testing services. Macrogen expects its current efforts requesting deregulation and to become a leader as it advances into the global B2C market to be recorded as a game changer for Macrogen that enabled the company to propel itself forward once again and grow into a robust global enterprise.

Wal

l Stre

et Jo

urna

l

An article from the Wall Street Journal in the United States entitled “Bankrupt uBiome Sells Intellectual Property to Psomagen for $7 Million” covers the news of the Psomagen-Macrogen

consortium acquiring the assets of uBiome, the flagship microbiome company of the United States

GENE&GUTBOME GUTBIOME+


Reaching for the Sky

with All of Humankind

Epilogue

Chairman Jeong-Sun Seo

“I think that good enterprises must have good intentions.”

Macrogen’s management slogan is Humanizing Genomics (To work for the benefit of all mankind) and it is manifested through the company’s efforts to help humankind realize the dream of living longer without the disease. For this purpose, Macrogen has been building its own big data infrastructure comprising information on genomics, medicine, and lifestyle factors, among other things, to provide disease prediction services tailored to individuals.

The world is facing a risk of all countries becoming much poorer due to rapidly aging populations and skyrocketing healthcare costs. That is why governments around the world are taking the lead in promoting a paradigm shift for their countries’ healthcare and pharmaceutical industries, shifting the focus from treatment to prevention, and from standard treatment to personalized medicine.

Essential to this paradigm shift is predictive medicine backed up by a massive amount of data. Precision medicine, a global trend, is a way to overcome the looming crisis of incalculable healthcare expenditure by utilizing big data, a key component of the Fourth Industrial Revolution. Healthcare information stays at the hospital in Korea. It will not take long, however, before individuals manage their own healthcare and genetic information, as it is done in the United States. What is most critical is speed: data will fall into the hands of foreign companies unless we rush ahead and take the lead.

Predicting such fundamental changes in healthcare, Macrogen has

Epi

logu

e

Opening remarks


poured a lot of resources into preparing for these changes. Since 2010, Macrogen has joined forces with the GMI-SNU (Genomic Medicine Institute of Seoul National University) to carry out a number of large-scale genome projects including the 10,000 Asian Genome Project. Since February 2016, Macrogen has taken part in the GenomeAsia 100K Project participated in by a total of 19 countries in Asia to analyze the genomic information of 100,000 Asian people.

Macrogen is currently in possession of the largest volume of genomic information of any private company in the world. Macrogen is planning to share the genomic database and the research results that it has secured through various projects, with the Precision Medicine Initiative of the United States and Genomics England of the United Kingdom in a bid to accelerate the global realization of precision medicine based on genomic information.

The realization of precision medicine ultimately depends on the integration of medical information and genomic information. Macrogen has been building the Macrogen Precision Medicine Network through the execution of MOUs with various top-tier medical institutions in Korea, such as Seoul National University Bundang Hospital, Korea University Medical Center, and the National Cancer Center, in order to conduct joint research regarding precision medicine. Macrogen is preparing to expand its collaborative relationships with major overseas hospitals for joint research in that area as well.

I hope that Macrogen can become a “Google” for the Biotech Industry. Having recognized people’s future needs when the Internet was beginning to connect people around the world, Google focused on

separating false information from true information by assigning weight to data.

My visions are that Macrogen, with the world’s largest collection of human genome data that could be used for diagnostic purposes, will be able to distinguish true information from false information and rate the significance of all the valid data so that it can provide valuable healthcare information to the entire world.

Like Google in the information technology sector, Macrogen will continue to push itself according to this vision to become the most influential company in the world’s biotechnology ecosystem.

Epi

logu

e


History of

Macrogen

1997~2019

HUMANIZING

GENOMICS

2003Apr.Developed a genome analysis chip (BAC DNA chip) for the diagnosing hereditary chromosome disordersOct.Decoded Corynebacterium Genome Information jointly with CJ

2005Jul.MGenbio successfully cloned a pig for the treatment of diabetes Aug. Provided DNA chips to the Ministry

of Food and Drug Safety for research

Aug. MGenbio produced transgenic pigs able to produce chemotherapeutic agents

Dec.Won the MoTIE Minister Prize at the 5th Digital Innovation Awards

2007Jun. Established Soma Therapeutics, an affiliate for molecular diagnosis and new drug development through the discovery of disease genesNov.Launched Macrogen Japan Corp.

2004Jan. Relocated HQ to the World Meridian

Venture Center in Gasan-dong, SeoulOct.Launched the Macrogen Young Scientist

Awards for the Korean Society of Molecular and Cellular Biology

Nov.Acquired ISO9001 certification for all its gene business areas

Nov.Established a partnership with Applied Biosystems in the U.S. for DNA Chip Business

Dec.Established the U.S. subsidiary Macrogen, Corp.

2006Mar.Obtained approval from the Korea Food and Drug Administration for the sale of CGH DNA chip for the

diagnosis of chromosome disorders Jul. Acquired VectorCore A Co., Ltd. specializing in vector

developmentAug. Signed a contract with Changhae Ethanol on joint research

for the commercialization of the Zymomonas mobilis strain for ethanol fuel

Oct.MGmed acquired NeoGenetic Co., Ltd, a genetic testing company

Dec.Won an prize for excellence at the Health Industry Technology Exhibition in Korea for its Macrogen Back Chip H1440 used to diagnose chromosome disorders

History of Macrogen 1997~2007

1997-2000 Establishment of Venture Business 2001-2010 Establishment of the Global Genomic Information Network

1997Jun. Macrogen Inc. was established Aug. Established the Disease Model

Special Life Resource BankSep. Macrogen’s technology

selected by the MoST for the Commercialization of a special disease model developed through gene transplanting and targeting

1999Apr.Participated in the MoTIE’s

industry-based technology planning project – research planning

May. Began support for MDA (Muscular Dystrophy Association) Korea

Jun. Certified by the SMBA as a business venture

Nov.Developed a pilot product for the DNA Chip 0.4K and launched the KOGEN 100K Project

2001Jan. Succeeded in cloning mice for

the first time in Korea Jun. Completed the draft Korean BAC

Clone MapNov.Registered Zymomonas mobilis

genome sequence with the NCBI

2000Jan. Established the DNA Chip

Support CenterFeb. Became first biotech venture

company to be registered on the KOSDAQ

Aug. Became the eighth in the world to have decoded the genome of the microorganism Zymomonas mobilis

Sep. Opened the Life Science Institute and the Bioinformatics Institute

Dec.Won the Biotechnology Prize at the Bioindustry Awards 2000

1998May. Selected by the MoTIE for the 1998

industry-based project (transgenic mice using cDNA Array – library development)

Jun. Participated in the MoHW’s 1998 Venture SME Project (Drug)

Jun. Developed bioengineering anti-aging skincare drug (bioengineering cosmetic additive) using recombinant Hsp70

Jun. Developed new substance efficacy search transgenic mice for new drug development (Hsp70 inductor exploration)

Sep. Participated in MoST’s Leading Technology Project 1998 (commercialization of a special disease model developed through gene targeting and transplanting)

Dec.Designated by the Military Manpower Administration as an alternative military service organization

2002Feb. Completed construction

of high-tech SPF mouse facilities (Gayang-dong, Seoul)

Jul. Established MGenBio Co., Ltd, a heteroplastic organ transplant specialist

Dec.Signed MOU for Korea – Mongolia Disease Gene Discovery Joint Research with Mongolia’s Ministry of Welfare

2013Jan. Designated by the Seoul Metropolitan Government as the

2012 2H Best Contributor to Job Creation Jun. Chosen as a leader in technological development for the MoTIE’s Advanced Technology Center (ATC) Jul.Macrogen, Inc. obtained Clinical Laboratory Improvement

Amendments (CLIA) certification Nov.Expanded and upgraded cutting-edge SPF mouse facilitiesDec.Won a presidential citation for contributions to the Korea Venture-Startup Expo 2013

2014May. Selected by the Korea Exchange as the 2014 KOSDAQ Hidden Champion May. Chosen as a Global Specialist Candidate by the MoTIE Jul. Signed an MOU with ToolGen on the Transgenic Mouse Project Jul. Signed an MOU with EONE Laboratories and EONE Diagnomics Genome Center for a molecular diagnosis and genomic analysis projectDec.MGmed listed on the KONEX Dec.Won the Best Company to Work For award from the SMBA and the MoEL

History of Macrogen2008~2015

2001-2010 Establishment of the Global Genomic Information Network 2011-Present Realization of Precision Medicine

2008Feb. Established the Daejeon branch of

Macrogen in KoreaJun. Established the European branch

of Macrogen (Amsterdam, the Netherlands)

Jul.Won the Grand Prize in the 2008 Korea Health Industry Awards in the field of bio ventures

2010Feb. Macrogen-GMI SNU made

public a genome analysis of 10 Koreans and the establishment of the Korean reference genome

Mar.Launched the Asian Genome Road Project with the GMI-

SNU and the Chosun IlboJul. Signed a comprehensive

agreement with LG Life Sciences for R&D and market promotion in the field of personalized treatment based on personal genome information

2012Jan. Acquired CE certification for

‘Macrogen BAC chip H1440’ for the diagnosis of chromosome disorders

Feb. Signed an MOU with Ahn-Gook Pharm for joint entry into the Chinese diagnosis market

May. Started joint development of personalized lung cancer medicine with Oscotec

Sep. Obtained certification as the Best HRD Institution (from the MoEL, the MoEST, the MoKE, and the SMBA)

Dec.Launched the U.S. subsidiary Macrogen Clinical Laboratory (MCL)

2011Jan. Obtained ISO13485:2003 certification for an in-vitro diagnosis deviceFeb. Launched Axeq, a premium global sequencing service brandJul. Co-published the discovery of massive RNA transcriptional base modification in Nature Genetics Nov.Won ‘$10 Million Export Tower’ Award on the 48th Trade DayDec.Co-published with the GMI-SNU a paper entitled “A transforming KIF5B and RET gene fusion in lung adenocarcinoma revealed from whole-genome and transcriptome sequencing” in Genome Research

2009Jul. Selected to be participant in the New Growth Engine Smart Project operated by the Ministry of Knowledge Economy in the biosimilars marketJul. Signed an MOU for the promotion of genomic analysis services and personalized medicine with Boryung Pharmaceutical

2015May. Selected as the 2015 KOSDAQ Rising Star by the Korea ExchangeJul. Launched the new CI and sloganJul. Selected by the MoTIE as the leading institution for ‘the development of a Korean style foundation medicine model for personalized anti-cancer treatment’Sep. Recertified as the Best HRD Institution (by the MoEL, the MoEST, the MoKE, and the SMBA) Nov.Won the MoTIE Minister’s Citation for Contributions to the Specialized Global Company Fostering ProgramDec.Won the MoEL Minister’s Citation for contributions to job creationDec.Won ‘$20 Million Export Tower’ Award on the 52th Trade DayDec.Macrogen, Inc. merged with MCL and Axeq Technologies, Inc.

2018Jan. Signed an MOU with Soonchunhyang University for joint research of healthcare innovations through precision medicine based on medical and genetic information Jan. Signed a T/T contract with Seoul National University Hospital regarding drug-induced gene scissors recombination vector Mar.Established Macrogen Asia Pacific Pte. Ltd.,

SingaporeMar.Secured CRISPR-Cas9 gene editing technology

from the Broad Institute of MIT and Harvard in the USA

May. Selected by the Korea Exchange as the KOSDAQ Rising Star 2018 for the 5th consecutive year Jun. Won the Most Transparent Management Award at the 10th Korea KOSDAQ Awards hosted by KOSDAQ Listed Companies Association Jul. Registered a patent in Korea for blockchain

technology

Aug. The Korean HQ and Bundang PMC received CAP accreditation

Aug. Signed an MOU with SK Telecom for the development of AI-based genomic analysis solutions

Aug. Signed an MOU with SNU Bundang Hospital Research Division for joint research on precision medicine based on genomic information

Sep. Registered a patent for blockchain-based data sharing in Korea

Nov.The Korean HQ and Bundang PMC acquired CLIA accreditation

2019Feb. Acquired GMP acknowledgement for in vitro diagnostic reagents Mar.Signed an MOU with the Australian microbial company MicrobaApr.Launched MICROBE & ME (Formerly MybiomestoryTM), human gut microbiome analysis services Apr.Signed an MOU with Exosome Plus for the joint development of exosome-based diagnostic and treatment solutionsMay. Designated as a GCLP (Good Clinical Laboratory Practice) facility by the KFDAJun. Made strategic investments in Microba, an Australian microbiome analysis firm Jul. Selected by the Korea Exchange as the KOSDAQ Rising Star 2019 for the 6th consecutive year

Jul. Selected as a “2019 Korea’s Best Job Company” by the Ministry of Employment and LaborSep. Registered a patent in the U.S. for Blockchain data-sharing technologyOct. Registered a patent in Korea for fusion protein comprising AXL-MBIPOct. Published the large-scale Northeast Asian Reference Database (NARD) in Genome MedicineDec. Published the GenomeAsia 100K international consortium research results as a cover feature in NatureDec. Signed an MOU with Thermo Fisher Scientific for global CES market expansionDec. Acquired the assets of uBiome, an American microbiome company

History of Macrogen 2016~2019

2016Feb. Participated in the GenomeAsia 100K ProjectMar.Signed an MOU with Korea University Anam Hospital on joint research to actualize precision medicine based on genomic information Apr.Signed an MOU with the National Cancer Center to conduct joint research on precision medicine based on genomic analysis for cancer patientsMay. Selected as the 2016 KOSDAQ Rising Star by the Korea ExchangeJun. Chosen as one of the “300 World-Class Companies” by the MoTIE and the SMBA

Jul. Signed an MOU with Chilgok Kyungpook National University Hospital for joint research on precision medicine based on genomic analysis for cancer patients and patients with rare diseases Jul. Signed a contract with Shaanxi Chang’an Health Care Medical Association, a Chinese JV partnerDec.Acquired the Family-Friendly Company certification from the Ministry of Gender Equality and FamilyDec.Established MiGenstory, a joint venture with LG Household & Health CareDec.Selected by the MoTIE as ‘the World Best Product 2016’Dec.Won a 30 Million Dollar Export Tower Award on the 53rd Trade DayDec.Certified as a DAkkS International Authorized Test Institution (ISO/IEC 17025 and DNA profiling)Dec.Established the branch office in Spain (Madrid)

2017Mar.Recognized as a KOLAS International Authorized Test Institution (ISO/IEC 17025 and DNA profiling)Mar. Introduced the Illumina NovaSeq 6000 systemApr.Obtained NGS Clinical Laboratory certification from the KFDAMay. Selected as the KOSDAQ Rising Star by the Korea Exchange for the 4th straight year May. Signed an MOU with the Korea Association of Health Promotion for the establishment of disease predicting big dataJun. Declared a Vision for the Next 20 Years marking the 20th anniversary of being establishedJun. Signed a three-party MOU with the Korea Certified Welfare Consultant Association and Joy Hospital for disease prediction and personal genome analysis serviceJul. Released My Genomestory™, a personal genomic analysis serviceSep. Signed an MOU with Knotus for non-clinical model animals for new drug evaluation

Sep. Established Macrogen Europe B.V. (transition of a branch office into a subsidiary)Oct. Became the first to obtain Personal Information Management System (PIMS) certification in the genomic analysis industryOct. Signed an MOU with the Myongji Medical Foundation for business and research cooperation for the clinical adaptation of disease control protocols based on genomic informationOct. Macrogen USA received CAP accreditation. Dec. Won the MoTIE minister’s prize as an Exporter of the World’s Best Products on the 54th Trade DayDec. Designated as have the “Best Labor-Management Company Culture” in 2017 by the Ministry of Employment and Labor

2011-Present Day and Actualization of Precision Medicine


Healthy People, Happy World!

An innovative biotech company pioneering in genomics, Macrogen

Macrogen will continue to devote itself to bringing the quality of life for all of humankind to the next level through bold investment and genuine care for people realized through human-centered management.

THE STORY OF MACROGEN · Chairman Seo is an avid reader of the Diamond Sutra, reading it up to...

Documents

Transcript of THE STORY OF MACROGEN · Chairman Seo is an avid reader of the Diamond Sutra, reading it up to...