Although some expected this year’s J.P. Morgan Healthcare Conference to be light on announcements from next generation sequencing (NGS) companies, there has been a fair share. For example, PacBio noted 76 orders of its new Revio instrument, while Complete Genomics announced that its fleet of sequencers are available for sale in the United States for the first time.
On Wednesday, Element Biosciences jumped into the news cycle with an announcement of a novel pricing structure. The company is offering a “throughput-based model” for its AVITI system. A user can sign up for $138k and receive up to 230 kits for a quarter. It’s like a service contract program for the instrument, but with reagents included.
The way to think about this model, explained Molly He, PhD, CEO of Element, is a “genomics buffet.” Just like an all-you-can-eat buffet at the Golden Corral—you pay a set price, whether you eat one plate of pancakes or go back for more. But if you end up going back three times, the average cost per pancake is much lower.
Users who run 3,000 30X genomes, or equivalent, can access genomes for as little as $200 per genome. With 1,500 samples, the cost would be roughly $400 a genome. Also, the traditional sales process will remain intact—which yields a $560 genome.
But Charlie Johnson, PhD, director, Texas A&M AgriLife Genomics and Bioinformatics Service, is not sure the program makes sense for his facility.
“$138k a quarter means that the machine has to bring in approximately $552k per quarter just to cover the rental, assuming standard margins,” he explained. “A core has to bring in $2 million a year in revenue to cover that. Then, I’d have to look at the throughput potential to see if that is even possible with that machine.”
What kind of user is this program a good fit for? Levy says it’s for any laboratory that sees sample volumes in the low hundreds to low thousands. For those who want to test drive the program, Element allows a user to try the program for a quarter, with no further commitment.
The San Diego–based company says that it wants to enable a flexible program that would allow a customer to amortize a set cost over the course of the year. The structure delivers $200 a genome, or $2 per gigabase, on a benchtop instrument. Hitting this mark would, however, require operating 3–5 AVITI instruments. Obviously, this deal is not for everybody. But, if a user achieves a ballpark of 3,000 genomes or more, then they are sequencing at the lowest price in the industry, noted Shawn Levy, PhD, SVP of applications & scientific affairs at Element.
The key thing that Element is trying to change, noted Levy, is the model that everybody has been conditioned to adopt over the last decade—that there is a dramatically different cost for sequencing depending on what box you choose. Element wanted to develop a program that was flexible, he said, so a user wouldn’t have to count their samples a month or a year, but instead have a predictable, total cost.
“We’re changing the paradigm that everyone’s used to,” noted Levy, “and the way that everyone’s been thinking about genomics for a long, long time.”