As the size of the NGS sequencing market grows and an increasing number of NGS purchasers evaluate an expanding array of providers and technologies (see William Blair’s Next-Generation Sequencing Survey), NGS companies are beginning to look beyond price points and product specs in an attempt to stand out.

Ion Torrent on the Offensive. Consider Ion Torrent, an NGS newcomer recently acquired by Life Technologies, which launched its first product (the Personal Genome Machine) a scant four months ago. Since then, Ion Torrent has announced improvements to the PGM’s output, read length and sample prep (coverage from Matthew Herper of Forbes here and here).

As it seeks to distinguish the PGM from its competitors’ products, particularly Illumina’s offerings (see J.P. Morgan’s Next Gen Sequencing Survey), Ion Torrent has added a new dimension to its PGM campaign. Ion Torrent recently launched several creative online advertisements, with its side-by-side comparison of the PGM and Illumina’s MiSeq system—modeled after Apple’s popular “I’m a Mac/I’m a PC” campaign—raising the most eyebrows.

Read the rest of this entry at Genomes Unzipped »

In hindsight, it might have been ill-advised to offer predictions about the near-term future of genome sequencing during the same week in which one of the year’s major industry conferences (the JP Morgan annual Healthcare Conference) is taking place.

There have been a number of high-profile announcements from genome providers over the past two days. Life Technologies disclosed it had booked 60 orders for the recently unveiled Personal Genome Machine (PGM) and, more importantly, announced that the PGM’s output would be increased by an order of magnitude (10 megabases to 100 megabases) in Q1. Not to be outdone, Illumina, the current market leader in genome sequencing technology, responded later the same day by unveiling its new MiSeq machine. As both Matthew Herper and Keith Robison explain in detail, the MiSeq is a direct and formidable challenger to the Personal Gene Machine as a result of its price, speed and utilization of Illumina’s established sequencing platform.

But the biggest stories, at least by one metric, belong to sequencing newcomer Complete Genomics and Illumina (again). Complete Genomics announced this week that the Institute for Systems Biology (ISB) has ordered a whopping 615 whole-genomes as part of the ISB’s ongoing research into the genetics of neurodegenerative diseases, including Huntington’s. Meanwhile Illumina, at the same time it was launching the MiSeq machine, disclosed that it “currently has a 1,000-genomes backlog” for its own whole-genome sequencing service.

Let’s forget, for a moment, about how much these whole-genome sequences cost and reflect on simply how many of them there are. Just over a decade ago, Bill Clinton and Tony Blair were lauding the first draft human genome sequence; and the Human Genome Project would not declare the first genome “complete” until the spring of 2003.

Again, seven and a half years ago, there was only one single genome sequence to be had anywhere in the world. And it took 13 years and $3 billion dollars to get just the one. Today? We casually discuss hundreds and even thousands of genomes to be sequenced in a matter of months and for thousands of dollars apiece (not $1,000, but likely less than $10,000).

Even if the $1,000 genome does not arrive this year, 2011 will almost certainly see 1,000 genomes sequenced. And in many ways, that may be the worthier milestone to celebrate. Every significant increase in the number of sequenced genomes means a corresponding increase in the amount of genomic data available to elucidate the genetic bases of human traits and disease. There is still a tremendous amount of work to be done to make sense of all that data (and a tremendous amount of environmental, trait and other data that must also be correlated), but sequencing thousands of genomes is a significant step in that process.

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The past few weeks have also seen strong third quarter earnings reports from market leaders Illumina (earnings recap) and Life Technologies (earnings recap), with both companies touting double-digit growth in their next-generation sequencing businesses. Illumina and Life Technologies (Life) are also hard at work on their next generation of products which are intended to compete more directly with the offerings from PacBio and CGI (Oxford Nanopore for Illumina, Ion Torrent and Starlight for Life). Meanwhile, China’s own sequencing entrant, BGI, continues to buy up sequencers (first from Illumina, more recently from Life), and what will soon become the world’s largest provider of genomic sequencing has its own ambitious plans.

These recent positive commercial developments reflect increasing demand for next-gen sequencing, for both platforms and services. While today’s New York Times puts the cost of a complete human genome at $20,000, the retail price is actually much lower in many instances. For instance, Illumina recently announced price cuts to $14,500 for groups of five or more genomes and to $9,500 for sequencing with “potential direct clinical value,” and several companies are offering genomes in the $5,000 to $10,000 range, particularly for new, large orders.² As the next-gen sequencing market continues to expand (pdf) from traditional research applications to encompass more pharmaceutical R&D and, ultimately, clinical diagnostic applications, prices will continue to fall. A “$1,000 genome” by the end of 2011 or early 2012 remains a strong possibility, although keep in mind that what matters is “not how much a genome sequence costs, but what you can (or cannot) do with that sequence.”

As Prices Fall and Profits Rise, Lawsuits Abound. In addition to strong earnings and successful IPOs, another recent trend in the sequencing space has been an uptick in litigation. One of the movement’s most enthusiastic adopters has been Helicos Biosciences, one of the first companies to attempt to commercialize a next-gen sequencing platform.

First, Helicos Biosciences (Helicos) announced this past spring that it was “repositioning” itself from a (largely unsuccessful) provider of sequencing tools to a (hopefully more successful) developer of molecular diagnostics tests utilizing its HeliScope technology. Then in August, shortly after PacBio filed for its IPO, Helicos responded with a lawsuit alleging PacBio’s infringement of four patents protecting its single-molecule sequencing technology. Most recently, Helicos amended its complaint to bring in most of the rest of the sequencing industry – in the form of Illumina and Life – as additional defendants.

According to Helicos’ new CEO, Ivan Trifunovich, the company’s litigation activities:

…further support our recently announced strategic initiative to maximize the return to our shareholders on the technology investments that we have made by vigorously protecting our seminal next-generation sequencing intellectual property rights.

PacBio has already denied Helicos’ infringement claims and we can expect both Illumina and Life to follow suit. In the meantime, Helicos will continue its efforts to avoid a NASDAQ delisting.

In case you were concerned that CGI might be left out of the patent infringement litigation fun, fear not. CGI is currently engaged in its own legal wrangling with Illumina (and Illumina’s predecessor, Solexa). Following a familiar narrative, Illumina filed a patent infringement lawsuit against the company in August, shortly after CGI filed for its IPO. CGI then countersued, denying infringement, alleging Illumina’s patents are themselves invalid or unenforceable and including a Sherman Act (antitrust) claim against Illumina for good measure. Those patents, by the way, are themselves the subject of protracted litigation between Illumina, Life and one of Life’s predecessors, Applied Biosystems.

And it is not just patents that have the sequencing companies squabbling. The most recent piece of litigation comes courtesy of microarray manufacturer Affymetrix, a company that does not appear to have embraced whole-genome sequencing in its business model but is nevertheless suing PacBio for allegedly pilfering both employees and trade secrets.

What’s Next for Next-Gen Sequencing. It is not surprising to see commercial success beget corporate litigation. Litigation, particularly patent infringement litigation, is generally time-consuming, expensive and risky. But as the sequencing space continues to expand, those companies that succeed commercially will become increasingly attractive litigation targets. Mo’ money, mo’ problems, as the saying goes.

In the coming months, genomic sequencing is likely to follow a familiar storyline, with a flurry of new technologies and business models giving way to consolidation within the marketplace. Only a fraction of the current platforms and companies will make it and, as Helicos has already demonstrated, those that fail to succeed as sequencers will have plenty of incentive to sue their more successful competitors in an attempt to recoup substantial investments.

While the outlook for next-gen sequencing companies is certainly positive, at least in the short-term the prospects for life science litigators appear to be every bit as rosy as the companies they represent.

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¹ It appears that the public markets may be opening for biotech more broadly. According to The Wall Street Journal, there were “18 offerings in October, the most in three years.”

² Not to be overlooked, as Luke Jostins reports from last week’s ASHG meeting, is the role of exome sequencing using next-gen platforms and which is currently estimated at “roughly 1/7th the price of whole genomes.”

In brief, the SOLiD 4 generates 100 gigabases of data per run at a cost of $6,000 per genome, a cost that appears to account solely for the consumables and does not include the cost of the machine or of interpreting all of that sequence data. According to GenomeWeb, Life is also promising an upgrade to its system – SOLiD 4hq – in the second half of 2010 which it expects to triple the data output at half of the cost: 300 megabases per run, $3,000 per sequence.

As for the impact of Life’s SOLiD 4 announcement, Matthew Herper hits the nail on the head:

But although the news is good for Life and will keep it in the game as the price of decoding the genetic code continues to drop, the specs of this new machine don’t seem good enough to upset Illumina’s place as the first choice of geneticists. “It’s a solid improvement, but I don’t think this changes the game,” says Isaac Ro, an analyst at Leerink Swan who follows both companies.

Ro estimates that Illumina currently has 60% of the market in gene sequencers, with the rest split by Life and Roche and perhaps 1% going to Helicos BioSciences. At genome centers, it’s more like 70% Illumina…

New challengers like Pacific Biosciences, which is close to marketing a faster sequencer that can read longer stretches of DNA, and Complete Genomics, which sells sequencing as a service, might be able to compete with Illumina by offering very different products — even if they don’t do the job as cheaply on a per genome basis. But for the time being, Illumina may remain dominant partly because it is so dominant.

Clearly, though, neither Life nor Illumina’s other competitors have any intention of ceding the sequencing market just yet. And with genome sequencing combatants Life, Illumina and Complete Genomics all making headlines in the past few weeks, one has to wonder what the sequencing companies that haven’t made a big splash yet in 2010, including Roche and third-generation sequencing companies such as Pacific Biosciences and Oxford Nanopore, have up their sleeves. The 11^th annual Advances in Genome Biology and Technology (AGBT) meeting looms in just under a month, but given the breakneck pace of recent developments, it wouldn’t be surprising to hear more news before then.

What to do with all those new tools? While we wait for the next big sequencing development, one aspect of Life’s announcement that should not be overlooked is the provision by the Life Technologies Foundation, the company’s philanthropic arm, of $5 million in grants over the next two years “to accelerate the education of physicians in the field of molecular medicine.”

Of the initial grants, which total $600,000, the most intriguing is the one made to the Scripps Translational Science Institute to create a new accreditation board, the Association of Genomic Medicine, which “will be tasked with… establishing an educational curriculum that would lead to the accreditation of physicians in genomic medicine.”

The Genomics Law Report’s recently concluded series – What ELSI is New? – tackled the most pressing ethical, legal and social issues facing genomics and personalized medicine. One of these, as discussed in commentaries by Hank Greely and Misha Angrist, among others, was the general inability of practicing physicians to integrate rapid advances in genomic medicine into patient care.

There is tremendous innovation in the whole-genome sequencing market which produces, in turn, increasingly inexpensive genomic data. But data, no matter how inexpensive, is still just data. As I have written before, for healthcare providers and their patients, the success of personal genomics ultimately depends on the ability to leverage that data in a way that benefits individuals, including by improving patient outcomes and reducing healthcare costs. Credit should go to Life Technologies for recognizing that a sequencing platform represents only one tool in the personal genomics toolkit.