This story originally appeared in Biocommerce Week, a newsletter that has been discontinued.
A little more than a month after rival Affymetrix launched its latest SNP array containing more than 1.8 million markers, Illumina has started shipping its competing 1-million-SNP BeadChip.
The new chips, which the companies talked up for months before the launches, are the latest development in a fierce rivalry for leadership in the genotyping market. For Illumina, the new genotyping chip is part of a strategy to offer commercial customers a comprehensive set of new tools for a variety of applications.
Illumina last week made its first commercial shipments of the Human 1M DNA Analysis BeadChip, which contains more than a million SNPs on a single chip. The chip contains both widely known copy number variation sites as well as novel CNV content derived from Illumina’s collaboration with DeCode Genetics.
An Illumina spokesperson told BioCommerce Week that the sales proposition is “driven by the content — not necessarily all of the content that came from DeCode, though, because the contribution that was from DeCode [only] applied to the copy number content. That’s not everything that’s included on the 1M chip. There’s a lot more that goes into that,” the spokesperson said.
Illumina claimed in a statement last week that the new chip is “the most comprehensive genotyping tool available for genome-wide association studies.”
Affymetrix would surely dispute that claim. Affy launched its Genome-Wide Human SNP Array 6.0, which contains more than 1.8 million markers, in late May. The firm said that its array would allow researchers to “perform the most powerful whole-genome association studies ever by genotyping more markers from more individuals at a lower cost per sample.”
During Affymetrix’s first-quarter conference call in early May, company officials said the Array 6.0 would help the firm take market share from Illumina, which rapidly gained ground during the previous two years (see BioCommerce Week 5/2/2007). They referred to the chip as “a real game changer for the industry.”
Stephen Fodor, chairman and CEO of Affymetrix, said during the call that the genotyping market “is an elastic market. It is driven by how many samples we can run.”
He said that Affymetrix’s next-generation products, which are produced in a single format, give the firm “the flexibility to get these out in the marketplace at the right price points to sort of hit the sweet spot of the volume curve versus revenue.
“When you look at this from that perspective, from the beginning of 2006 to now, the business has gone from having a lot of trouble in early 2006 to now more of a question of how exactly we execute these single-chip products out into the growing market this year,” said Fodor.
Last July, Affymetrix cut in half the price of its 500K array set. The new $250 price tag boosted sales in the second half of 2006, and according to Affymetrix officials helped the firm regain some market share.
Affymetrix’s customer base is heavily weighted toward academic customers. In announcing the release of the Array 6.0, Affy noted that the National Genome Research Network in Germany is using the chip in a large-scale study. The company also said this week that the Genetic Association Information Network is using the chip in a series of studies for psychiatric diseases (see briefs).
But Affymetrix officials have said that they expect more commercial pharma and biotech customers to begin using its genotyping tools. As a result, Affy made improvements to its automation equipment including a high-throughput scanner, as well as making arrays available in a 96-well format that is favored by commercial customers.
The Illumina spokesperson said this week that there is “an even spread” between the company’s academic and pharma/biotech commercial customers.
But Illumina’s strategy appears to be geared more toward reeling in pharma and biotech researchers.
The sales proposition is “driven by the content — not necessarily all of the content that came from DeCode, though, because the contribution that was from DeCode [only] applied to the copy number content.”
The firm is focused on integrating its three platforms — the BeadChip, the BeadXpress system for molecular diagnostics that was launched earlier this year, and the Genome Analyzer next-generation sequencer that also was recently launched — into a comprehensive offering for the pharma and biotech markets.
Illumina officials have predicted that the Genome Analyzer, which the firm gained through its $600 million acquisition of Solexa (see BioCommerce Week 11/21/2006), will provide a significant chunk of the company’s 2007 revenue, currently estimated at between $305 million and $315 million.
Death Knell for Analog Arrays?
While Illumina and Affymetrix are fighting over leadership of the genotyping market, Affy is clearly the dominant player in gene expression. But in recent statements Illumina CEO Jay Flatley has suggested that time may soon run out for analog arrays used for gene-expression applications, such as those sold by Affymetrix, Agilent, and Illumina.
He told investors at recent conferences that the plateau in the gene-expression market is only temporary, and that the market for traditional, fluorescence-based analog arrays will eventually be eclipsed by demand for digital gene-expression studies performed on the Genome Analyzer.
Claiming his company’s sequencer can double the size of the market, Flatley told investors at the Bank of America Healthcare Conference in Las Vegas in early June that “array-based gene expression is going to die out pretty fast” once digital gene expression using the Analyzer becomes popular.
Some array users share Illumina’s optimism about digital gene expression, but the big question remains when that will happen. According to most, the demise of the analog array is inevitable but a long way off.
According to Flatley, Illumina is not even “sure exactly how fast that is going to happen,” but he is certain that the benefits of the approach, which allows users to “digitally count transcripts in the genome and to do that without knowing the sequence” is “a new way to do expression and to do it simultaneously across the genome” that will ultimately drive adoption.
— Justin Petrone contributed to this article.