January 15, 2013 (Vol. 33, No. 2)

Mainstream Use Is Increasing as Applications Are Proven and Economics Worked Out

DNA sequencing, developed in the late 1970s, has revolutionized biology and heralded the real beginning of molecular biology. The technology is the foundation for the publication of the human genome. But the technology remained cumbersome, labor intensive, and very expensive. The incredible potential of being able to decipher genes has lead to the development of next-generation sequencing technologies that perform the task in days instead of years and at a fraction of the cost. And with that trend comes another question: when will DNA sequencing fully expand from research tool to routine clinical use?

The potential alone will drive the market in some respects. Kalorama believes that research projects and emerging clinical applications will push the overall market for DNA sequencing including systems, services, and consumables to over $1.8 billion by 2016.

Companies such as Roche/454 Life Sciences, Qiagen, Illumina, Applied Biosystems (ABI), Complete Genomics, and Pacific Biosciences are highly competitive in this market with next-generation systems.

After a period of relative stability from 2009 until 2011, the market for sequencing saw major developments in 2011 and 2012. The introductions of the Ion Torrent PGM, PacBio RS, and MiSeq have changed the situation in the market, with more new technologies expected from Ion Torrent as well as Oxford Nanopore.

The most significant sequencer systems in the market have been the result of acquisitions and/or licensing. For example, Illumina acquired Solexa, ABI acquired the SOLiD technology, and Life Technologies in turn acquired ABI as well as Ion Torrent. More companies are offering sequencing services, and genome scientists are hard at work seeking correlations between human disease and the architecture of individual genes, gene patterns, cellular pathways, and metabolic events.

This work brought to the table a host of “omics”—pharmacogenomics, pharmacogenetics, proteomics, and metabolomics—all of which are supposed to play a part in companion diagnostics and increase the value of sequencing.

The overall market for DNA sequencing, including equipment and services, research projects, and emerging clinical applications, is growing steadily and is expected to reach over $1.8 billion by 2016.

$1,000 Genome

While sequencer instrument revenues may decline in the short term, the consumables from the growing installed base will grow the market for several years. It is hard to predict the timing, but cheaper sequencing technologies are anticipated to eventually lead far below the $1,000 genome, which will open up new possibilities. Several technologies currently under development could rapidly change the market in unpredictable ways once introduced.

Claims are usually made in advance about performance, but the true extent of their potential uses remains to be determined by the scientific community.

The research market for sequencing has been enough to spur competition and new products, but research funding is declining. The National Human Genome Research Institute of the NIH is the main channel for sequencing-related funding, primarily through its extramural budget. Funding has declined from $580 billion in 2009 (as a result of increased stimulus funding) to $525 billion in 2012.

With resource funding expected to grow slowly or declining, manufacturers of DNA sequencing systems and makers of consumable products will need to seek other markets for products for growth in the market to continue.

Cancer Treatment

Cancer treatment is one of the major areas where sequencers are expected to have the largest impact in the near future. This is due to the many types of genetic aberrations involved, and the variations between cancers, which can affect treatment and outcome. There is a large network of consortia and cancer genome projects, with varying degrees of coordination taking place. Along with the tumor itself, the circulating DNA in the blood may allow the determination of response to drugs, disease burden, and likelihood of recurrence.

The latest sequencer technologies permit analysis at the level of DNA sequencing, RNA sequencing, microRNA sequencing, methylation, transcription factor, and other regulatory protein binding; all of these are being explored as potentially valuable approaches. New technologies allowing single-cell sequencing may also be particularly useful for cancer-related applications.

Today, there are standard treatments used for tumors with similar pathology, but tumors are not routinely genetically sequenced. There has been a remarkable increase in the use of sequencing in cancer. Tumor sequencing can provide clues to the genetic composition of a tumor that is not available by other technologies.

Further, it is anticipated that sequencing studies will identify new genes that we had not previously known to be involved in cancer. This could give rise to new test panels. In February 2010, Johns Hopkins Kimmel Cancer Center reported that a personalized, blood-based cancer test could be available in five years. The test identifies tumor DNA “rearrangements” that are specific to the individual patient and so could track whether cancer treatment is working or if the disease has recurred.

There are challenges as DNA sequencing expands beyond research. The rapid changes in medicine are likely to bring about many new questions and challenges. Individual disease areas can each have their own intricacies, and the advances have been gradual. Data analysis and data management can be difficult tasks.

For example, the storage of an individual’s sequence data, and how to ethically approach situations where a disease can be predicted but not treated, are examples of the difficult issues. Furthermore, sequence data can be used to uniquely identify an individual.

The information also crosses into areas unrelated to medical treatment, such as ancestry, abilities, and other traits. Combined with the ongoing innovations permitted by the internet, it is hard to predict exactly how these things will progress over the longer term.

Without a doubt, many of the clinical applications will continue moving into mainstream use as they become proven and the economics gets worked out. Due to lower regulatory hurdles, these developments will most likely occur more rapidly in Europe than in the U.S.

Bruce Carlson ([email protected]) is publisher at Kalorama Information. Kalorama’s report on DNA Sequencing Equipment and Services Markets is available from www.KaloramaInformation.com

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