In a country where the failure rate of start-ups has been traditionally high, Macrogen stands out as the first ever bio-venture company that has successfully expanded across the globe. Founding Chairman, Dr Jeong-Sun Seo, explains his vision for the company as a world leader in genomic research and preventative medicine.
There have been major medical and scientific breakthroughs since the foundation of Macrogen in 1997. For example, the Human Genome Project, an attempt to discover the entire human genomic structure, has allowed new approaches to biological phenomena. In terms of the Asian Genome Project, in which Macrogen plays a key role, what potential does this have to make a difference to the lives of people across Asia?
In the near future, I believe that the cost of sequencing genomes will fall below the $1,000 level. In fact, I think in the near future, those who are sequencing genes will have to pay money to participants to collect the data we need. There are currently 100,000 doctors in Korea, and among them, 80,000 doctors are providing medical services. If we say they work eight hours a day, and if we say that they are treating about five patients an hour, they are treating 3.2 million patients a day.
In doing so, they can share patient data in real time so that they can see if a patient is already taking a particular medicine, and so on. The question is, how helpful will this be for the industry and the patient? Our aim is to reduce cost of healthcare by tenfold.
Healthcare costs are very high around the world. It is a problem not only faced by advanced countries, but also by developing countries. If we do not address this issue, the whole medical system around the world will collapse in the near future.
To put it simply, we can find the genetic causes of hereditary diseases by looking at genes and this will help people tremendously. However, what is more important is to help people avoid the lifestyle choices that contribute to the development of certain chronic diseases in the first place. We can let people know if they have genes susceptible for asthma and diabetes, for example. Then they can make conscious decisions to adapt their lifestyles or living arrangements to avoid the onset of such diseases. That's preventative medicine and that's what we are trying to achieve.
Before we started the interview, you said that Macrogen is aiming to be the “Microsoft of the bio-venture era.” Where do you see this company in five years from now?
When we first began our business, we did not have any technology that could be a game-changer. However, by using technology over and over again, we have been able to accumulate experience in optimizing this technology. With optimized technology, we have engaged in global marketing activities. Our priority was to provide low-cost services for many people around the world. Our ultimate goal is to accelerate the era of preventative medicine.
We now own a total of 21 Illumina HiSeq X machines. One machine can map the genome of 2,000 people per year. This means we can take care of over 40,000 people a year. Last year, we operated our machines full-time and we operated more machines than any other company.
There are only 30 companies and organizations in the world with these Illumina machines. Macrogen is number 1 in terms of using these machines efficiently, and this allows us to reduce some operation costs. In turn, this allows us to reduce the prices of our products and services, but the quality remains superior. An accurate analogy would be that we intend to sit on the shoulder of the giants. We are interested in the data, not the technology. We accumulate the data. Finally, we will use this data for business.
One of our specific advantages is that I am a medical doctor and I understand the problems in hospitals. Korea is not a big country but we have a large network of hospitals and insurance companies, so we can predict what will happen with the healthcare system.
You have said yourself that in order to complete the medical revolution of the 21st century, characterized by regenerative and informatic medicine, supporting tools are indispensable. In the light of this, Macrogen Inc. has developed and commercialized basic tools for genome medicine. We recently saw the worldwide launch of services such as FamplanTM and ABOOBATM. How important are these commercial services to the future growth of your company, and what are your expectations in terms of sales of such services in the years ahead?
One big market is the research market, where we operate through government grants. The other big market is the clinical market, which we are now moving into with preventative medicine products, such as pre-tests for pregnancy and cancer screening. Now women are giving birth at a much later stage in their lives, which means that the risks for mother and child are higher. This means there is a huge market for pregnancy pre-tests, especially in China. We even have products for pet genomes. This is how we are diversifying our business.
Last year you merged your three Macrogen affiliates in the US into one company, Macrogen Corp. How will this merger affect your operations and your competitiveness in the US market?
In the future, Macrogen will need to conform with Clinical Laboratory Improvement Amendments (CLIA). If we get CLIA approval, then we can start producing data for medical doctors. Without CLIA, we cannot provide such genome data to doctors, due to legal restrictions, which is why CLIA is very important.
In Rockville, Macrogen Corp USA already has a CLIA-approved lab, which makes us a viable partner for researchers and pharmaceutical companies. The merger will enable us to streamline our operations across all of our facilities in the USA and to operate more efficiently.
Your slogan, "Humanizing genomics", was unveiled last year. What message is this slogan trying to convey?
We want to use genomic information for the benefit of people. We want to be closer to our customers.
The Korean government wanted to support the development of Macrogen as a promising venture company and they provided the services of branding experts, but I did not like any of their suggestions. Then one day I was visited by a Korean friend who lived in New York. We discussed some ideas and the next day he suggested "Humanizing something.” And then it dawned on me, “Humanizing genomics”, and that is how it came about.
One recurring theme that we have come across since arriving in Korea is the lack of successful start-ups, which is often attributed to an innate fear of failure in the Korean psyche. One of the reasons why Macrogen is so interesting to us is because you're the first bio-venture company in Korea and you have grown into a globally successful business. What was the secret of your success?
Throughout the 1980s I was offered opportunities to become involved in genetic engineering companies, but they all failed. At that time, I felt the business world was not for me.
Then, in 1992, I got a big grant from the Korean government for genetic engineering a mouse, which made a lot of headlines in Korea at the time. Following this, a Korean government officer met me for dinner and offered me a grant for research related to a G-7 project, which also proved to be controversial as it was attacked by opposition MPs in Parliament who felt money was being wasted just to publish a paper. So the government official encouraged me to establish a company, but I flatly refused at first, explaining that business was not for me. He was very disappointed and threatened to cut my funding unless I started a company. This had a big impact on me as my research was so important. I approached one close, successful friend and explained my situation. He felt the establishment of a bio-venture may require $10 million. But actually, when I analyzed it more, I felt $400,000 would be enough. I spoke to some friends who were willing to invest small amounts of money, regardless of the mission. They introduced me to business experts who established the company and a business plan so that I could focus on my research.
At first we focused on producing mice for pharmaceutical companies, but the pharmaceutical companies changed their priorities and then I bought the sequencer and we began to focus on the Korean genome and the Asian genome.
In 2001, I released the results of the Korean genome project. We managed to reduce the cost by 10% by simply repeating the process so many times. But the Korean market is limited, so we had to encourage participants by producing advertisements asking people to send a sample with $5 via FedEX and we would sequence it. We knew that the secret to success was volume.