Diffusion of Technology
A trend of significant interest within the life science community is the diffusion of sequencing technology into clinical and commercial applications. Whereas the other trends we have discussed are characterized by a number of forces working at odds, the two major forces driving this trend—namely increasing demand for higher performance and a rapidly expanding technical performance envelope—are both working together to enhance adoption outside of research.
While most sequencing discussions focus on the technology's performance-improvement trajectory, we believe that the evolution of customer needs is both more important and changing fast enough to be of considerable interest. This demand is driven by a desire to decrease false negatives and false positives from an analytical perspective and to increase positive and negative predictive value from a clinical perspective.
Performance dimensions that clinical and commercial customers are seeing as more important for limiting false results and increasing predictive value include the plexity of the analytical modality (how many markers are measured in a given test), the sensitivity of the analytical modality (the limit of detection or the ability to detect mutated cells in a background of wild type), and the quantification capability of the analytical modality (the ability to count the number of times a particular analyte is present).
For example, we have observed an increasing number of markers used to inform the decision of whether a colorectal cancer patient should receive EGFR antagonist drugs such as Erbitux (cetuximab) and Vectibix (panitumumab). While the label of Erbitux only goes so far as to say “trials have not shown a treatment benefit for…patients whose tumors had KRAS mutations in codon 12 or 13,” many other markers with negative predictive value have been identified and are routinely used to determine whether or not to use these drugs.
For example, market-leading clinical laboratories offer and routinely perform fairly comprehensive EGFR pathway analysis of additional KRAS mutations as well as mutations in the genes BRAF, NRAS, PIC3K, and others. While these pathway analyses are often carried out as a series of one-off tests (rather than higher plexity panels of tests) and often accomplished using capillary electrophoretic sequencing (rather than methods with higher analytical sensitivity and quantification capability) we believe that as more markers are discovered and as the community becomes more interested in the relative abundance of important mutations, demand for the unique technical capabilities of high-throughput sequencing technology will be created in clinical contexts.
We currently estimate that at least 20% of this application area will migrate to high-throughput sequencing platforms by ~2014 with accelerating penetration thereafter. Furthermore, we see a multibillion dollar opportunity for the technology and associated services associated with a genome-first cancer-care paradigm (beginning in areas such as triple negative breast cancer) likely to become significant from 2014–2020.
We call the most long-term and potentially most significant trend in sequencing the omnipotence of sequencing technology. We define this trend as the gradual diffusion of high-throughput sequencing technology outside of the realm of genomics and into the analysis of other analytes including small molecules, proteins and peptides, and intracellular phenomena across research, clinical, and commercial applications.
This potential is driven by the fact that high-throughput sequencing technology has become the most simultaneously sensitive and massively parallel analytical instrumentation yet invented. While genomics applications, as a large market involving the analysis of relatively simple analytes, represents the low-hanging fruit for the technology, we observe and foresee a generation of pioneers in molecular biology building a steady stream of additional applications.
Given the size of the general analytical instrumentation market (about $40 billion) and that of the regulated, commercial in vitro diagnostics market (similarly at about $41 billion), the implications for existing market participants and customers are considerable. If a few racks of sequencing instrumentation can replace an entire clinical lab worth of clinical chemistry, immunoassays, microbiology, and molecular diagnostics equipment, industry heavyweights could ultimately be at risk.