What is the future of the genome sequencing market? While the landscape is fragmented, according to Frost & Sullivan, it leaves room for mergers, acquisitions and partnerships over the next few years aimed at capability development and business expansion.
The Human Genome Project (HGP) was to the 1990s what space research was to the 1960s: an overarching scientific mission, firing the imagination of an entire generation. The HGP united the global scientific community toward a common goal, making it one of the largest collaborative international projects. In this regard, it was different even from space research, which was fueled by political competitiveness. The HGP sequenced and mapped the entire human genome for the very first time, revealing insights that helped scientists understand the nature of the human. This was achieved over 13 years at a cost of $3 billion. With the advent of high-throughput sequencers or next-generation sequencing (NGS), an entire human genome now can be sequenced in a few days at a cost of about $1,000. This staggering progress has been made in less than 15 years; however, the “man on the moon” moment for genome research would be to make sequencing possible at a cost of $100.
The idea of a $100 genome has several important implications. At that price point, genome sequencing would cost less than an X-ray and would certainly be in higher demand. This also raises questions about the need for and use of genome analysis: Would a $100 genome be of good quality? What would a diagnostician do with genomic data? How would one make sense of gigabytes of data? This conundrum seems to align itself with Maslow’s facetious Law of the Hammer, which states if the only tool available is a hammer it becomes tempting to view all the problems as nails. After all, cost alone cannot justify prescription for whole genome sequencing. Frost & Sullivan analyzes these questions from the perspective of innovations in analytics and informatics tools for genome sequencing.
A Growing Market
NGS informatics covers products and services used for computing, analyzing, interpreting and storing NGS data. The market covers both cloud-based and on-premises software platforms offering primary, secondary and tertiary analysis of sequencing data. Frost & Sullivan estimates that the U.S NGS informatics market generated revenue of $416 million in 2016. Revenue is poised to grow at a compound annual growth rate of 19.0% through 2021 to reach $992.5 million, as shown in Exhibit 1, which also reflects the potential impact of growth drivers and challenges in best- and worst-case scenarios.
Growth is expected to be accelerated by policy frameworks that streamline regulation and facilitate reimbursement. The U.S. Food and Drug Administration and other regulatory authorities are expected to come up with detailed guidelines on the approval and reimbursement process of NGS-based tests and precision medicines by 2018. Also helping growth is the increasing demand from pharmaceutical companies to use NGS services to shorten their product development cycles.
Increasing cost pressures and regulatory uncertainties have shifted health care business models from curative toward preventive. This requires a better understanding of molecular biology associated with diseases to develop targeted drug and companion diagnostic packages, for which genome sequencing becomes vital. According to a Tufts Center for the Study of Drug Development Impact Report (June 2015), nearly 42% of all biologics compounds and 73% of oncology compounds in the pipeline have the potential to be personalized medicines.
A Crowded Market
The NGS market landscape is fragmented, with large corporations operating side by side with numerous smaller companies and start-ups. Frost & Sullivan estimates that the top 10 companies control about 40% of the market, leaving the larger piece of the pie to dozens of smaller companies. This opens up the possibility of mergers, acquisitions and partnerships over the next few years aimed at capability development and business expansion.
Provided below is a snapshot of some companies in the NGS informatics space that are developing analytics solutions to complement the sequencing procedure.
Fabric Genomics (Oakland, Calif.)
Fabric Genomics offers a complete genome analysis solution including secondary and tertiary analysis and clinical reporting services for NGS data. It has partnered with other secondary/tertiary analysis companies to strengthen its portfolio. Fabric Genomics’ platform includes proprietary ranking algorithms, standard analysis workflows, family and cohort analysis, secure data sharing and collaboration across institutions for accurate interpretation of difficult cases. The software offers actionable patient reports, biomarker discovery and cohort analysis, population reference genomes, and data harmonization and longevity.
Bina Technologies (Belmont, Calif.)
Bina Technologies (now a subsidiary of Roche Diagnostics) offers the appliance-based Bina Genomic Analysis Platform, which combines high-performance computing with secondary data analysis tools, including the Burrows-Wheeler Aligner and genomic analysis tool kit. The Bina platform is suited for the clinical environment given its rapid delivery time, and is an optimized molecular diagnostics platform given Roche’s background in developing diagnostics assays and tests.
Eagle Genomics (Cambridge, England)
Eagle Genomics provides sequencing and gene expression bioinformatics services to biopharmaceutical, consumer goods and agricultural companies. Eagle primarily supports tertiary analysis, helping customers organize and analyze NGS data to find biomarkers. The company is agnostic about the commercial or open-source tools it uses. Instead, it looks at its customers’ needs and tailors a solution accordingly. Its ElasticAP cloud-based platform for storing, sharing and analyzing NGS data enables customers to use standard applications and access public data sets via either a Web or command-line interface.
Illumina (San Diego, Calif.)
Illumina is a leading manufacturer of sequencers, and has played a key role in the genomic revolution. It is one of the companies that have picked up the $100 genome gauntlet. In January 2017, the company unveiled its latest sequencer, NovaSeq, which is a giant stride in that direction. Illumina is able to leverage its leadership position in the NGS market to reach a broad base of customers with its informatics solutions.
PerkinElmer (Waltham, Mass.)
PerkinElmer’s primary product in the NGS informatics market is its GeneSifter Analysis Edition. GeneSifter supports the analysis of microarrays, NGS digital gene expression, NGS whole transcriptome, NGS small RNA, NGS ChIP-seq and NGS resequencing data. PerkinElmer also offers GeneSifter Lab Edition, a laboratory information management systems solution for all forms of DNA sequencing. As a sequencing service provider, PerkinElmer offers NGS informatics support as a component of its overall service offering. The company’s proprietary, cloud-based platform provides secure access to data for flexible and custom analyses.
The Road Ahead: Direct-to-Customer Sequencing and the ‘Omics’ Revolution
Frost & Sullivan found that the applications most directly affected by fast, low-cost, and high-throughput genome sequencing have been drug development, academia and clinical research. While it may be premature to conclude that a genome sequence will replace an X-ray image overnight, indications are plentiful. Companies such as 23andMe (Mountain View, Calif.), Color Genomics (Burlingame, Calif.) and MapMyGenome (Hyderabad, India) are already offering direct-to-customer (DTC) genetic kits for certain clinical indications. The DTC industry didn’t even exist a decade ago, but today is a thriving market segment in the personal genomics space.
However, the true impact of the genomic revolution is that it has evinced interest in other “omics” information—proteomics, metabolomics, transcriptomics, microbiomics and so on— that can provide insight into various facets of human physiology. An individual’s “omics” information has become a crucial component in assessing the risks and predispositions of acquiring a host of indications. By embracing these personalized tests, world economies and health care organizations can save millions of dollars spent searching for the proverbial needle in the haystack, and preventative health care will become a more concrete lifestyle choice.
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