Spatial Biology: Market Outlook Across the Drug Discovery Pipeline

April 2, 2024

By Allison Proffitt 

April 2, 2024 | Miguel Edwards, a partner at DeciBio Consulting, broke down the market outlook for spatial biology at last week’s Precision Medicine TriConference. “We think about this market really as opening up a new dimension of biological insight into tissue analysis,” Edwards said. “You’re seeing the excitement and promise for really improving our understanding of fundamental biology and really driving better therapeutics and better diagnostics.” 

DeciBio is a life sciences tools consulting company that strives to understand the market holistically, Edwards said. The group estimates that the spatial biology market is expected to reach $860 million this year, and to grow at about 21% each year, bringing it to about $2.27 billion in the next five years.  

The drivers of growth, Edwards said, include increased access and familiarity, simplified end-to-end workflows that enable scalability and reproducibility, and more advanced analytics made possible by AI. But there are growth moderators as well, he pointed out. These are still expensive technologies, both in terms of initial investments and ongoing reagents and analysis. Reproducibility is still a concern, and the results can be quite variable depending on factors as simples as the humidity in the lab or the technician who handled the samples. Clinical utility is also still somewhat in question, he pointed out. It’s not always clear why answers from these more expensive solutions are better in practice than less expensive methods. Finally, he highlighted that properly collected and stored tissues can be hard to come by. None of these growth moderators will change long-term adoption, he believes. They are simply slowing growth in the short-term.  

But even with expected growing pains, Edwards pointed out that both 10x Genomics and NanoString surpassed their own (and DeciBio’s) instrument sales predictions for 2023. About 60% of the spatial biology market is driven by growth from 10x and NanoString as well as Akoya Biosciences and Bio-Techne. “A lot of the revenues are going to these companies, in part because of the cost of instrumentation,” Edwards said.  

He did report trends among pharma and CROs in particular to build multi-platform ecosystems, not committing themselves to one technology or platform provider. They are recognizing that different instruments and analytes offer orthogonal value and orthogonal information at different stages of the R&D process, he said.  

He also highlighted an area of growth specific to digital pathology. “We’re seeing a lot of partnerships between pharma companies and diagnostic companies and some of these AI-based vendors that are trying to drive companion diagnostics,” he said, mentioning Akoya’s partnership with Acrivon Therapeutics to develop a companion diagnostic test.  

Another trend DeciBio has noticed, he reported, is the number of newer sequencing companies augmenting their instrument software to, “characterize things in a spatial fashion.” Element Biosciences hinted at such an offering recently at AGBT, he said. Singular Genomics has offered a software upgrade for their G4X platform that delivers spatial data as well. “It’s quite interesting to see that these emerging sequencing players are looking for a vector in which to differentiate themselves,” he added.  

Where in the Pipeline? 

Spatial genomics is having the most significant impact on basic research and translational research, Edwards reported. “You want to understand as much as possible, want to dive in, get as much resolution as possible and really dig into basic biology and get a better understanding.” As you move down the drug discovery pipeline, he said, clinical research is really driven by spatial proteomics. In the clinic and larger clinical trials, companies are focusing on ,“lower-plex signatures that are cost-effective and can be deployed at scale.”  

DeciBio expected to find single cell and spatial competing head-to-head a bit, but instead found labs are using single cell sequencing to validate the findings from spatial analysis. That validation—at least in the mid-term—is driving single cell sequencing, he said, though he agreed with an audience member that this use case will probably diminish over time.  

Clinical trial use of spatial, he said, tends to be retrospective at this point, looking at banked samples to understand response versus non-response. “I do anticipate as you start to see more data or momentum that we’re going to see more spatial in clinical trials,” he predicted. He quoted one executive that said his organization would incorporate spatial in every Phase 1 trial if they had data showing a strong predictive value for spatial analysis.  

The quote—gathered during a DeciBio market survey—is representative of the overall sense of these technologies’ potential, Edwards said.