As the pandemic heated up in mid-May across Taiwan, nucleic acid testing case numbers rose steeply, overwhelming hospitals responsible for testing. The New Taipei City Hospital’s Sanchong Branch, in the heart of a red zone, not only had to conduct testing of its own patients, but also ran specimens from rapid testing stations in Sanchong, Banqiao, and Jiangzicui.

At this time, the Sanchong hospital branch has seven fully automated testing machines the size of coffee makers working day and night. Each machine has the capacity to test nearly 100 specimens per day.

From R&D to manufacturing, the testing machines and PCR testing reagents come from GeneReach Biotechnology, a company based in the Central Taiwan Science Park.

In May and June, GeneReach shipped around 200 instruments to testing units around Taiwan, coupled with sales of around 200,000 testing reagents.

GeneReach chairman, Mr. Leo Liu, relates that, not including testing reagents developed in-house by laboratories at major hospitals, GeneReach’s testing reagents for commercial use enjoy the largest market share in Taiwan.

One minor obstacle is that GeneReach’s instruments cannot achieve the cycle threshold (Ct value) level necessary to confirm cases. Accordingly, when a positive test is indicated, it must be analyzed on another machine to determine the Ct value in order to be accepted as a confirmed case by the Taiwan Centers for Disease Control (CDC). So why should hospitals adopt the instruments?

Chang Pao-chi, director of the Medical Department and Clinical Pathology Section at New Taipei City Hospital, relates that GeneReach’s machines are compact, and their reagents can be flexibly adjusted in accordance with specimen volume, reducing reagent waste. Moreover, due to the high degree of automation, during busy times the laboratory does not need to assign staff to monitor the machines, which is especially critical at the peak of the pandemic.

Last year the Ministry of Foreign Affairs, noting the ease of operation, ordered machines from GeneReach to send to allied countries with less plentiful resources.

“During instrument development, we handed them to the cleaning ladies to make sure that even they could use them,” says Leo Liu.

Riding the tide of the pandemic, GeneReach’s sales have gone through the roof. Last year total sales volume reached NT$857 million, after tax net profits NT$257 million, and earnings per share of NT$6.34 - all new records. On the strength of this doubled sales volume, the company climbed to second on the CommonWealth Top 100 Rapid Growth Companies.

Identifying commercial opportunities of COVID from chicken farm

This small company with just NT$400 million of capitalization has honed a great sensitivity to business opportunities after three decades of specialization in zoological diseases.

Last January, having just returned from a business trip across the strait to China, Leo Liu made the bold decision to invest in the development of novel coronavirus testing reagents.

Taiwan’s chicken industry first encountered coronaviruses several decades ago. And as viruses constantly mutate, a new round of vaccines are given every other year. He calculated that this human coronavirus would be difficult to eradicate with medicine or vaccines, so using screening to detect virus carriers and stop the contagion chain would be essential.

In other words, novel coronavirus testing reagents would be a long-term business opportunity.

Within a month, GeneReach rapidly developed a novel coronavirus testing reagent that takes one-third the time to complete testing compared to others.

(Source: Chien-Tong Wang)

As the pandemic ravaged the world last year, within a short period GeneReach began selling reagents to Indonesia, Myanmar, Saudi Arabia, Panama, Eswatini, and the European Union under an Emergency Use Authorization (EUA) arrangement.

COVID-related products accounted for 60 percent of GeneReach’s revenues last year.

In the 1980s Leo Liu went to the United States to study zoology. But after just a year in a PhD program there, he decided to return to Taiwan to start a business.

Fortunately, his experience in the U.S. helped him to come up with an area in which to found a business. At the time, PCR (polymerase chain reaction) technology had already found broad application in academia, and Liu had experienced using it in a lab.

So when he saw that major international pharmaceutical giant Roche planned to use the PCR technique commercially, and invest in infectious illness testing on humans and animals, he decided to follow suit.

GeneReach began working with a U.S.-based biotech company to develop hepatitis B and C and Down syndrome testing reagents, but discovered that the company lacked the capital to take on the massive outlay necessary for clinical testing on humans. In order to keep the company alive, he had to make his first bucket of gold, and he had to settle for starting with testing for shrimp illnesses, an area about which the major global pharma companies were not particularly sanguine.

With just seven employees, GeneReach managed to command 70 percent of the global shrimp testing market. Yet Liu knew very well that the low technical barrier to entry meant that competitors could come in at any time to claim market share. Accordingly, he shifted his focus to small- and medium-sized aquaculture companies.

Unlike large aquaculture installations, the small ones do not have the means to set up their own laboratories. Yet they still have the need to conduct on-site viral testing. So that customers would not have to go to outside laboratories, from 2005 GeneReach set about on the long road to company transformation with the development of testing instruments.

The long journey began with reading electrical engineering textbooks. Leo Liu describes it as akin to a musician putting together a stereo system.

(Source: Chien-Tong Wang)

A native of the Tachia region of Taichung, Liu was highly familiar with the capabilities and knowhow of Taichung’s precision machinery industry. So he sought out parts and components manufacturer KS Terminals to learn all about mechanical structures and electronics, and then went looking for screw and firmware vendors in Taoyuan and Tainan.

GeneReach developed its first-generation nucleotide testing instrument in 2011. Though it was the world’s first portable PCR testing unit, the market was disinterested. The first generation was semi-automatic, requiring the manual extraction of specimens, causing customers to find it too difficult to operate.

It took seven more years before GeneReach finally developed a fully automated nucleotide testing instrument. However, it came at a cost, as the company lost money for five years straight.

Creating the Nespresso method

GeneReach’s business model was patterned after Nespresso: using an innovative approach to serve customers high quality espresso with ease - an approach that leans on the company’s exclusive patented coffee pods and capsules.

Liu relates that GeneReach would offer testing instruments at an inexpensive price, and make its money back by selling its proprietary reagents.

Twenty years after founding the company, Leo Liu decided to test the waters with dengue fever. He approached Tsai Chi-chun, an associate professor at Kaohsiung Medical University who had long engaged in research on combating dengue fever. He told her that if they used GeneReach’s instruments, even rural health departments could do their own testing, which opened the door wide open to bilateral cooperation. Today, GeneReach’s dengue fever reagents have received certifications from the European Union and the Panamanian and Indonesian governments.

Years of effort have helped GeneReach cultivate experts in legal regulations and certifications. Early last year, the company’s POCKIT™ Micro Duo Nucleic Acid Analyzer obtained the EU’s CE-IVD mark, clearing the way for sale throughout Europe.

And although he has had to come full circle, boosted by the rising tide of COVID-19, Liu has finally achieved the vision he had for his business when he founded it all those years ago.

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Translated by  David Toman
Edited by TC Lin
Uploaded by Penny Chiang