By Kevin Davies
Oct. 6, 2008 | Complete Genomics emerged from stealth mode today brandishing an audacious service model for wholesale next-generation sequencing, with its first human genome already assembled and the CEO’s pledge to reach the magical “$1000 genome” price point as early as spring 2009.
“Our mission is to be the global leader in complete human genome sequencing,” chairman, president and CEO Clifford Reid told Bio-IT World in a briefing last week. “We are setting out to completely change the economics of genome sequencing so that we can do diagnostic quality human genome sequencing at a medically affordable price. Essentially, [we’ll] transition this genome sequencing world from a scientific and academic endeavor into a pharmaceutical and medical endeavor.”
Based in Mountain View, Calif., Complete Genomics has raised $46 million in three rounds of financing since its incorporation in 2006. Unlike its commercial next-gen sequencing rivals – Roche/454, Illumina, Applied Biosystems (ABI) and Helicos – Complete Genomics will not be selling individual instruments, but rather offer a service aimed initially at big pharma and major genome institutes.
Complete Genomics is building what Reid calls “the world’s largest complete human genome sequencing center so we can sequence thousands of complete human genomes, so that researchers can conduct clinical trial-sized studies.” If all goes according to plan, that 32,000-square-feet facility will deliver 1,000 human genomes in 2009 and an eye-popping 20,000 genomes in 2010.
But that’s just the beginning. The firm plans to build 10 genomes centers in the U.S. and abroad over the next five years in partnership with various organizations and foreign governments. “Some of the countries that care a lot about having a national capability in biotech are very interested in developing their own genome center,” Reid says.
The $4000 Genome
Although the data have not yet been published or released, Reid says his team produced its first human genome sequence last July. “It’s getting a bit long in the tooth already,” he jokes. “The total materials cost was about $4000.”
The genome coverage was 22-fold from 67 gigabases (Gb) of mapped reads. “The speed of the instrument is about 10 times as fast as ABI and Illumina,” Reid claims. “This [genome] ran four instruments for one run of a week. This is a 28- instrument-day experiment. By the launch of our product in Q2 [of 2009], it will be a 4-instrument-day experiment.”
Reid says the concordance with the HapMap was slightly greater than 98 percent. “There’s a comparable quality to the Illumina genome” announced early this year, “but about 10 times cheaper and about 10 times faster.”
When the product is launched next spring, “we fully anticipate the materials cost of that genome will be just under $1000,” Reid says. “We’re going to price the genomes at $5000 each, which covers, of course, not only material but also instruments and labor and overhead.” Reid admits it’s an incomplete measure of cost, but it has become the industry’s standard accounting method.
By those criteria, “it will be the first $1000 genome,” says Reid.
The Complete Genomics technology is based on co-founder Rade Drmanac’s work in sequencing-by-hybridization using a ligation strategy and gridded arrays of up to one billion DNA “nanoballs” (see accompanying Bio-IT World story). Reid’s expertise in computer science and Drmanac’s in biochemistry proved to be a perfect complement. “The convergence of biotechnology and computing has really enabled a whole new generation of DNA sequencing that’s going to change the world,” he says.
A serial entrepreneur, Reid returned to MIT after taking two software companies public to “walk the halls” in search of new ideas. But instead of computational science and the media lab, “I found myself walking the halls in biology – because of this convergence, because biology in general and genomics in specific was transitioning from being a wet bench science to a computer science.”
Reid met MIT systems biologist Doug Lauffenburger, who joins Leroy Hood, George Church and Illumina co-founder Mark Chee on the firm’s advisory board. The investors are led by Prospect Venture Partners and include Genentech, which Reid says is interested in cancer sequencing.
“I have to say I was initially very skeptical of the technique that’s basically sequencing by hybridization,” says Hood, reached by phone in Seattle. “But I’ve been very impressed with the quality of the data they’ve generated on a couple of small projects and the rate at which they can generate the data.” Hood says he’s anxious to review the firm’s genome sequence data, but he’s impressed with the pricing, which he calls “way out of the ballpark.”
As for the service model, Hood thinks it can work because the company is focusing on a single application. “If you can do one thing and really learn how to do it well and develop the associated computational platforms… then that makes sense. They’re the only ones I’ve heard who are really diving into what frankly for sequencing is going to be the biggest market in the future – that is individual human genome sequencing.”
In fact, Complete Genomics is not the first company to explore a service model for genome sequencing – Kevin Ulmer’s Genome Corp. has a similar ideal – but it is the first using a next-generation sequencing technology. The company is presenting itself to genome centers and other parties as a wholesaler of complete human genomes.
Reid cites two main reasons for choosing a services model. First, he sees the key market as not solely traditional academic groups but large pharma, especially sequencing patients in a clinical trial.
“The pharmaceutical market has declared very clearly they don’t want to buy instruments,” says Reid. “They want to buy services, so that they get the data that enables them to do the discovery and development work, rather than have to own and operate a large-scale genome sequencing center.” Because of the economic impracticality of sequencing hundreds of people in a clinical trial, “the pharma guys are pretty much sitting on the sidelines, waiting for guys like us to come along.”
A second consideration is that the new sequencing technologies “generate a breathtaking amount of data,” says Reid. “Simply selling 10 or 20 instruments to a company doesn’t solve the problem. You then have to be able to mange huge volumes of data. We are putting in a Google-style data center to manage the data.”
Reid says Complete Genomics will become “the group that offloads [users] from the operational burden of running all those sequencers; the computational burden of running all those assemblies; and from the capital purchase burden, having to build up these huge genome centers they haven’t started building to generate the volumes of data we’re talking about. By providing this outsource service, they get access to the data so they can do the science.”
“Selling a few instruments to a research institute so they can set up 10 of them and going through the horrific process of building the workflow and the computing environment isn’t going to get to scale. This is the strategy that’s going to get us to scale, and scale is what it takes to really understand the human genome.”
Complete Genomics aims to double its eight operational instruments by the end of this year. “We’ll have between 64 and 96 by the end of ’09, and we’ll have 192 instruments in the center at the end of 2010,” Reid says.
Complete Genomics’ prototype genome center will cost an estimated $75 million. Reid then plans to build a further 10 centers – for about $50 million apiece – in the U.S. and abroad over the next five years, in partnership with other companies, research organizations, and countries. Last month, Reid met with Broad Institute director Eric Lander for the first time, and says one of the new centers “will very likely be with Eric Lander and the Broad Institute.”
At about half a billion dollars, the cost of building those genome centers is obviously “way too much for Complete Genomics,” Reid admits, “but nothing for companies, and countries, and institutional-level partners. So we think this will roll out as fast as we can generate the successful blueprint.” Reid anticipates those 10 genome centers will produce about one million genomes over the next five years. “A nice way to think about one million genomes is 1,000 people with each of 1,000 diseases. By the time we’ve done that, we will understand the genetic basis of all the important human diseases,” he says.
The near-term goal for 2009 is to focus on pilot sequencing projects for the commercial and academic communities to validate the technology and establish workflows that will form the operational blueprint for expansion. Ten percent of the firm’s sequencing capacity in the next two years will be devoted to a collaboration with advisory board member Lee Hood. The Institute of Systems Biology president is a partner with the Government of Luxembourg on a $200-million biobank and personalized medicine project. Complete Genomics will sequence five genomes for Hood this year, 100 genomes in 2009, and 2000 genomes in 2010.
As for targeting pharmaceutical companies looking to sequence patients in clinical trials, Reid admits that “not all of big pharma is going to jump on this on day one.” But he predicts two key groups of early adopters – companies pursuing cancer and mental illness. Both groups of diseases have a strong genetic component. Says Reid: “To date, the industry has not been able to find the rare variants that are causes of diseases and drug response. That’s a new capability we’re bringing.”
Another enticing constituency for Complete Genomics is the personal genomics or consumer genomics market. Reid agrees: “Knome and 23andMe and Navigenics and all those guys will essentially buy genome services from us and add a lot of value [and] transfer it on to the consumer population.”
Complete Genomics’ claims of reaching the $1000 genome in six months’ time begs the question of when, rather than if, Complete Genomics will bid for the Archon Genomics X Prize. “It’s not necessarily in our interest to do that first,” says Reid. “We only have 1000 genomes of capacity in 2009. The X Prize is 200 genomes: It’s 100 to win the prize and then you’re committed to doing 100 more for [X Prize Foundation] donors. That would be 20 percent of our capacity, and we’re pretty unconvinced that would be a good use of our capacity.”
The timing of this week’s public launch comes down to the need to engage belatedly with the scientific community. Stealth is good for technology development, but Reid says now it’s time to “get a little press and get people taking us seriously.”
Says Hood: “I think they’ve got a really good shot at doing something important.”
This article appeared in Bio-IT World Magazine.
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