REPORT HIGHLIGHTS
- The global market for sequencing products was valued at $2.3 billion in 2010 and nearly $3 billion in 2011. The market is forecast to grow at a compound annual growth rate (CAGR) of 17.5% to reach $6.6 billion by 2016.
- Sequencing instruments and consumables made up the largest market segment in 2011, with revenues of nearly $1.6 billion. The segment is expected to grow to $2.2 billion in 2016, a CAGR of 7.3%.
- Sequencing services comprise the fastest-growing market segment, totaling $987.6 million in 2011 and expected to each nearly $3.5 billion in 2016, a CAGR of 29.0%.
INTRODUCTION
The story of molecular biology is being both written and printed by sequencing tools—various chapters being currently authored by oncologists, ID experts, pathologists, and so forth. The narrative is understood by only those select few who have the cross discipline knowledge to comprehend what the sequencing tools output, and who also have the niche domain experience to act upon knowledge of that data. Recently, this story has begun to change as low cost next generation sequencing democratizes genome data, allowing a politics and commerce of inclusion, to enter the lab and now also the clinic.
Diagnostic manufacturers can now afford to develop sequencing tools as diagnostic shortcuts. The clinician does not need to understand the mathematical underpinnings of 16SrRNA coverage for phylogeny to run a rapid anthrax test.
Tandem repeats and retrotransposons have been conveniently converted into a “plus” or “minus” sign—a red light/green light clinical decision.
When Watson and Crick let the genie out of the research bottle, it was inevitable that this day would arrive—the only question was when it would happen. The types of automation that enabled cost efficiencies in sequencing tools have become decision tree shortcuts in the clinic, whereupon the first tangible fruits from the promise of personalized medicine have become apparent.
DNA sequencing is a strategic genomics tool that allows us to study how the genome varies among individuals and how that variation correlates to disease. Sequencing technologies are a critical part of today’s life-science industry, affecting a wide range of activity from drug discovery to diagnostics. This focused document profiles the top 10 companies of the industry and explores the underlying technologies driving the industry’s growth. Each technology is analyzed to determine its market status, impact on future market segments, and future growth potential. It should be noted that sequencing costs may only contribute 10% to 20% of a typical biomedical projects overall costs.
Of significance is the large occurrence of collaboration and co-ownership among the top players. Certain individuals, such as Mike Hunkapller and George Church, appear and reappear in several of the leading companies as co-founder, adviser or board member. But investment in seemingly rival efforts is also unusually high, underscoring both the connected nature of the research and commercial community, and also a “quantitative easing” or de-risking of being on the right team when the eventual winners are crowned in this high stakes field.
For this top 10 report, many factors were considered when selecting the companies. In general, chosen companies have a solid foundation built around their sequencing technology and have done an excellent job strategically positioning themselves into one (or many) of the facets of the industry.
In a reply to BCC from one of the top sequencing industry leaders, George Church explains in more detail some of the technological specifics to success. Next generation sequencing (NGS) systems are evolving rapidly, meaning this should be a core area of focus for a company should they want to excel now and in the near future.
Of the NGS systems, benchtop sequencers have a good niche currently. Although they can’t process as much as the larger high-throughput systems, being smaller has its obvious advantages. In the long term, benchtop sequencers may end up getting squeezed out of their niche however, finding no room for successful commercialization between the large high-throughput systems and handheld or portable sequencers which are based around nanopore technology.
At this stage there are several different approaches different companies are working on concerning nanopore-based technologies. Leading the way in this sector of sequencing will certainly help strengthen any company and their competitive position. Many companies are competing, and to a certain extent this is a race of scaling, that is, who can get the most nanopores into the smallest area.
One of the problems that arise from the sequencing process is the flood of data that results. A key issue to note is just how well informatics will be able to handle this data flood. As read lengths become longer and more accurate, the informatics becomes easier. Interpretation of the data is another issue that arises, but focusing on medically actionable determinations should simplify rather than complicate the interpretation of results.
Another point to consider is whole genome sequencing, a goal for many. Applications from this process becoming available everywhere at low cost aren’t too far into the future at the moment. One application has already emerged, a test for 2,400 highly predictive medical genetic diseases. This is superior to exome testing as these have the serious flaw of missing phasing information. For example, if a genome has mutations on say exon number 2 and exon number 7 of a gene, the exome doesn’t distinguish between two hits in one gene copy (the other copy is fine) vs. hits in both copies (no healthy copies).
Given these criteria to success, along with other factors which BCC chose to examine, BCC has selected these 10 companies for this report that we feel are deserving of recognition and are leaders in their industry, This list includes:
- Agilent Technologies Inc.
- Genia
- International Business Machines Corp.
- Illumina Inc.
- Knome Inc.
- Life Technologies
- Oxford Nanopore Technologies
- Pacific Biosciences
- Raindance Technologies Inc.
- Roche Holding AG.
As any top 10 list is invariably subjective, there are also several companies profiled in less detail. These companies were on the bubble, or should be watched in the near future.
STUDY GOALS AND OBJECTIVES
This document is a specialty report related to the BCC Research report BIO045D authored by John Bergin. The goal of this document is to provide a more in-depth look at the top tier DNA sequencing companies as well as some of the second tier companies to look for in the near future, and to note the technological changes within the DNA sequencing industry that are sure to play a role in the years to come.
More specifically, the objectives include identifying companies that are considered the leaders in their field and the technological means these companies are using to exploit their markets and dominate their field.
Key technology points explored include:
- How the NGS (next generation sequencing) benchtop systems will do versus the larger, high throughput systems.
- How well NGS systems will penetrate into diagnostics.
- Which up and coming nanopore-based technologies will emerge and how will this affect market applications.
- How well will sequencing informatics be able to solve the data flood.
- When will mass whole genome sequencing applications emerge.
Other major factors used to determine top companies in the field include:
- Alliance, merger, and acquisition strategy.
- Financing.
- Intellectual property (patent) portfolio.
INTENDED AUDIENCE
This study will be of particular interest to life-science research tools suppliers, pharmaceutical, diagnostics, nanotechnology, bioinformatics, semiconductor, and biotechnology companies. It will also be valuable to companies involved in genome sequencing projects, sequencing centers, manufacturers of microarrays, suppliers of molecular diagnostics assays, bioinformatics companies, and cancer researchers and clinicians. As this report is a profiling of top companies in the DNA sequencing field, the main audience should also include executive management personnel and marketing and financial analysts.
SCOPE
The scope of this report is focused on a select 10 companies in DNA sequencing, and the key areas in the field that are driving industry growth allowing these companies to succeed. These areas include Sanger, next-generation, and emerging sequencing technologies; the markets for sample preparation products, sequencing instruments and consumables; and bioinformatics and sequencing services. A key area BCC also explores is industry structure, noting strategic alliances and acquisitions along with pertinent patent information.
METHODOLOGY
Based on primary and secondary market analysis, this report analyzes the top 10 companies in DNA sequencing as well as some additional companies worth recognizing.