Attention Gene Sequencing Companies: Find A Niche
Nicholas Wade reported on the front page of The New York Times today that two research teams have now decoded the genomes of patients with rare diseases in order to identify the genetic cause of the diseases. This is good news for the genetics business, and specifically for the companies competing to lower the price of whole-genome sequencing. The main issue now is how these companies will differentiate themselves in the marketplace. Wade writes:
Geneticists said the new research showed it was now possible to sequence the entire genome of a patient at reasonable cost and with sufficient accuracy to be of practical use to medical researchers. One subject's genome cost just $50,000 to decode.
"We are finally about to turn the corner, and I suspect that in the next few years human genetics will finally begin to systematically deliver clinically meaningful findings," said David B. Goldstein, a Duke University geneticist who has criticized the current approach to identifying genetic causes of common diseases.Niche markets are what lie around that corner. On his blog, Massgenomics, Dan Koboldt, describes a conversation he had on the bus as he was leaving The Advances in Genome Biology and Technology conference on Marco Island, Florida, last week:
I happened to sit next to a very nice gentleman from Illumina. We got to talking, of course, and I asked him if they saw a threat from any of the new sequencing platforms presented at AGBT. I'm aware that Illumina currently enjoys a greater-than-50% share of the next-gen sequencing market, so I was curious about his impressions.
"We definitely see a segmentation of the market," he admitted.He's right. Whole-genome sequencing companies are beginning to get more targeted. Illumina, Inc. and Life Technologies Corp are both gunning for the general sequencing market while 454 Life Sciences, a Roche Company, is targeting researchers who are looking for long-read sequencing runs, which will eventually be clinically applied to matching donors for organ transplants. Pacific BioSciences, which recently jumped ahead in the race for the $1000 genome, is targeting applications. There's a good video story on PacBio by Nick Burns on The Wall Street Journal web site.Something had been bothering me about the sequencing-company presentations this year, and I finally realized what it was. During AGBT 2009, every player was gunning to take over the world. This year it seems like every sequencing platform has a niche in mind.
Both Ion Torrent, which recently unveiled a $50,000 sequencer, and Complete Genomics, which was involved with one of the research studies reported in the New York Times story, are looking to sell sequencing as a service. Kolboldt is skeptical about this market.
But Clifford Reid, CEO of Complete Genomics, told me on the phone yesterday that the company's goal is to make sequencing as simple as possible for customers. "We will be able to offer complete data for discovery work without customers having to become experts in the instruments and hardware," he said. "Our current challenge is to transition from an R&D company to a commercial company." Of course, the key to this transition is a cheaper price. Reid added that Complete Genomics has begun sequencing 500 genomes a month and that the price per genome was dropping to under $10,000.
Photo Source: Gertrud K
Correction: Complete Genomics is offering a whole genome sequencing service, but the company does not sequence individuals. It is focused on sequencing human genomes on a large scale, functioning as a genome sequencing wholesaler. The minimum order is eight genomes.