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FEATURE: Sequenom s Schuh Says Company Poised to Conquer SNP Market

NEW YORK, Dec 1 - Fresh from its first fruitful gene hunting expedition with Gemini Genomics, Sequenom is strutting its SNP-analysis stuff.

“Sequenom is right to claim a leadership position in mining the value of the genome,” Sequenom CEO Toni Schuh told GenomeWeb. “To the best of my knowledge, we are the only company in the world that can do full genetic screening on many people fast and efficiently .”

Schuh’s boast follows Sequenom’s and Gemini’s recent announcement that they had jointly discovered two novel genes associated with cholesterol levels. The pair used Sequenom’s MassArray SNP analysis system, which can analyze SNPs for hundreds of pooled DNA samples in a single reaction, to find cholesterol-related SNPs in Gemini’s voluminous database of twins’ DNA.

Sequenom sees this result not only as evidence that its genome screening method is the fastest and cheapest way to find genetic variations associated with disease, but also as a key milestone in its effort to conquer the SNP analysis market and transform itself from a genomics technology provider into a key player in the discovery of gene-based medicines.

“Now we are working our way up the stairs,” said Schuh. “We didn’t just want to sell genotyping systems to businesses then go away. We can set ourselves up so we are in relationships with leading [companies] in the industry.”

To enhance its genotyping capabilities for its partnerships, Sequenom is building a new 80,000 square-foot SNP analysis facility at its San Diego headquarters. The facility, which the company expects to be operational in March, will allow Sequenom to do 10 times the amount of genotyping that it can currently perform.

“We will be able to look at 500,000 SNPs in 5,000 people in 10 days,” said Schuh.

Sequenom’s current revenue source, the MassArray genotyping systems, is also attracting business. So far this year Sequenom has sold 17 MassArray systems, which can go for $400,000 to $1.1 million, including consumables and software, generating an estimated $9 to $10 million in revenues to date.   We couldn’t sell more ," said Schuh. “We are working at capacity.”

But the company expects to see revenues soar to nearly $30 million next year, due largely to massive SNP analysis projects it has begun with several partners, including Gemini and Incyte.

Fast, Cheap, and in Control  

Sequenom expects to succeed in dominating the SNP analysis market because it sees the whole-genome screening approach as much cheaper and faster than the SNP analysis methods of competitors like Orchid and AP Biotech.

Gemini and Sequenom announced their partnership in mid-April, and began work on the cholesterol gene project later. Gemini signed a similar agreement with Curagen earlier in April to find associations between human genetic variations and disease, and bought a fleet of 300 ABI 3700s from Applied Biosystems. It has yet to announce any results from either collaboration, Schuh pointed out. “We were the last to contract, the first to develop results,” he said.

Sequenom’s techniques, which involve pooling DNA from a number of individuals and multiplexing, also carry a less weighty price tag, Schuh said.

The initial cost for developing 500,000 SNP assays for 5,000 individuals would cost $25 million, Schuh said. He noted that this cost could be spread over 20 or so experiments, and calculated that a comparable series of experiments using regular genotyping on an individual-by-individual basis would cost $150 million.

This process would also be faster than conventional SNP scoring, taking just 10 days to four months, while the person-by-person method could take four years, even if a company could do a million SNPs a day, as Orchid has said it will be able to do at its New Jersey MegaSNPatron facility by the beginning of next year.

While no company has as yet sprung for the $25 million deal, Sequenom and Incyte signed a partnership last spring to analyze and develop assays for Incyte’s trove of about 100,000 SNPs within its gene collection using the MassArray system.

Incyte has already paid Sequenom an estimated $5 million for this effort, although Sequenom has not yet reported the revenue since the project is not yet complete.

Jumping into the Decode Ring

Through its partnerships with Incyte and others, Sequenom hopes to jump into the space that companies like DeCode Genetics currently occupy—that of validating disease-associated
genes.

Incyte already has the genes, and has patented its knowledge of the structure and function of genes. But together with Sequenom, it is working to validate the medical utility of these SNPs.

Sequenom has also collected a database of DNA from healthy individuals in California, and could conduct its own analysis over the next 12 to 18 months on the medical utility of genes within the genome, just as Decode is working to analyze the genomes of individuals in the Icelandic population.

But Sequenom is not looking to use up its $141 million pot of cash assets on this SNP analysis project. Instead, filled with confidence, it is seeking additional partners within the genomics, biotech, and pharma fields to help do the work.

“Anybody who would collaborate with us would find the right technology source,” said Schuh.

We will see the genes that contribute to the overall health of society and define a general morbidity SNP band and disease-specific SNP bands. This will guide you to immediate blockbuster drugs.”

 

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