By Ken Rubenstein
November 10, 2009 | Insights Outlook | Four companies currently have next-generation sequencers on the market and another, Complete Genomics, recently delivered its first 14 human genomes to customers based on its distinctive service model. Improvements are appearing frequently in next-generation sequencers, and these often translate to greater read length, more sequence per run, or new applications.
Based on sporadic published reports, our user survey, and expert interviews we conducted for a recent Insight Pharma Report, Illumina is the clear market leader. Roche/454 and Applied Biosystems/SOLiD constitute a second tier, in which the former appears to lead based on early market entry and longer read length. Among these three market leaders, 454 provides the longest reads at the highest cost per megabase. Applied Biosystems offers shorter reads and the lowest cost per megabase, while Illumina provides short reads at costs intermediate between the other two. All three are working frenetically to improve performance.
The fourth entrant, Helicos, entered the market in late 2008 with the first single-molecule sequencer. Its HeliScope costs nearly three times more than systems of the first three market entrants; read lengths are relatively short and throughput is exceptionally high. Pacific Biosciences’ single-molecule sequencing technology, due for launch in the second half of 2010, has generated lots of premarket enthusiasm among sequencers and must be considered a strong contender for future market share.
Meanwhile, Complete Genomics plans a January 2010 commercial launch as a service to provide the $5,000 (for high-volume accounts) complete human genome. Its cPAL (combinatorial probe-anchor) technology employs billions of DNA “nanoballs” immobilized on a slide. Throughput is expected to be high.
Next-generation sequencing instruments and consumables are selling rapidly and contributing nicely to growth rates of the three market leaders, each of which were already profitable corporations. A second round of product introductions in the next-generation market, which began with the introduction of the Helicos single-molecule system, will continue over the next year or two. Second-round players must offer significant improvements over current market entrants in order to merit viable market share. Significant barriers to market entry exist, and candidates can expect difficulty in overcoming the advantages of market momentum and power of current leaders. Third-round technologies, particularly those involving nanopores, remain speculative at present, but could serve to accelerate market decentralization by virtue of extremely low costs and high speeds.
Our Insight Pharma survey of next-generation sequencing system users in both industrial and academic institutions generated a number of interesting observations and opinions, some of which are mentioned here:
When asked which next-generation platform would dominate the market for the next two to three years, a majority of respondents selected Illumina’s Genome Analyzer.
A significant minority felt that Pacific Biosciences has the most exciting third-generation technology.
Personal genomics and cancer genomics are thought to be the two leading application areas.
Industry-based users feel they derive good value from their next-generation systems, but academic users are more divided in opinion.
Opinion suggests strongly that the cost of a human genome sequence will fall to between $1,000 and $50,000, with a substantial minority betting on the $1,000 to $5,000 range.
Growth and Diversification
Next-generation sequencing is characterized by great vitality, dynamism, and inventiveness. The market is not only growing nicely, but diversifying strongly into labs that have not previously been involved in sequencing. Next-generation is also starting to impinge on DNA microarray usage and should continue to do so as costs drop. The next several years are likely to prove a Golden Age for next-generation sequencing as the fruits of past innovation and continuing ingenuity are harvested to finally plum the depths of the human genome in all its complexity and variability. Each of the current market leaders are powerful companies with diversified product lines that extend well beyond their sequencing platforms.
A number of smaller companies have technologies that promise some advantage over existing systems, but whether these advantages will be great enough to merit significant market share remains very much an open question. Meanwhile, existing next-generation sequencing users are striving to expand the case for personal genomics and indeed for personalized medicine in general.
Ken Rubenstein can be reached at email@example.com.
Next-Generation Sequencing: Solving the Genome, by Ken Rubenstein, Ph.D., is available from Insight Pharma Reports. For more information, visit www.insightpharmareports.com/NGS/overview.
This article also appeared in the November-December 2009 issue of Bio-IT World Magazine.
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