Invitrogen has made its first foray into the next-generation sequencing field with an OEM agreement this week to supply Solexa with most of the reagents that its as-yet unreleased Genome Analysis System will use for sequencing, gene expression, and small RNA analysis applications.
The pact marks Invitrogen's first play in DNA sequencing in general and in the next-generation sequencing field in particular, but with a growing number of startups in the market the firm hopes to sign on additional partners.
Meanwhile, Qiagen, one of Invitrogen's chief rivals, has said it does not see much revenue potential for reagent makers in the next-generation sequencing market. Qiagen has never played a part in the sequencing market, and although company officials would not say whether the firm would get involved in the field, their comments made it seem unlikely.
Although Invitrogen is one of the world's largest reagent manufacturers and providers, the firm is looking to expand its OEM business and the Solexa alliance is part of this effort, according to Lisa Filippone, business area manager for PCR and nucleic acid separation for Invitrogen.
"We are working on expanding our capabilities and offerings in the OEM space. Growing our OEM business is something that we definitely are interested in doing that could be with other next-generation sequencing companies or any company out there in our space."
"We hope to have more" agreements with next-generation sequencing shops, said Filippone. "We are working on expanding our capabilities and offerings in the OEM space. Growing our OEM business is something that we definitely are interested in doing that could be with other next-generation sequencing companies or any company out there in our space," she said.
Filippone said Solexa had been using Invitrogen's reagents to develop assays even before the companies made their announcement last week. She declined to provide specific details on what reagents Invitrogen is supplying, other than saying they "make up complex kits for their assays. So, there are several complete kits, including enzymes, buffers, and other reagents specific to their assay."
Invitrogen offers a variety of technologies that could be potentially used with instruments that perform both sequencing and gene expression. For example, the firm has an alliance with Illumina to manufacture and sell tube-based oligonucleotides (see BioCommerce Week 12/15/2005). Invitrogen also offers a large portfolio of fluorescent probes through its Molecular Probes business.
Filippone said that in the "initial round" of the collaboration, Solexa will assemble the kits, but that may change as Invitrogen expects the partnership to "develop beyond that."
Financial terms of the Solexa collaboration were not disclosed, and Invitrogen officials could not provide a market-size estimate for reagents for the new sequencing instruments.
Solexa said it is currently taking orders for the new system and expects to begin broadly shipping it this fall.
Solexa merged with Lynx Therapeutics early last year and formally introduced its first-generation instrument, the 1G Genome Analyzer, in December. The company will begin its early-access program this month, during which it will ship early version instruments to large genome centers and a handful of other customers. Solexa plans to begin selling the fully developed instrument broadly by the end of the year.
According to Solexa CEO John West, the company is still "optimizing" its instrument for early-access customers. He recently told BioCommerce Week sister publication GenomeWeb News that the early-access system will have "a fraction" of the performance of the fully developed instrument, which is supposed to be able to sequence at least 1 billion bases per run to reach the goal of a $100,000 human genome at 20- to 30-fold coverage.
Solexa's early-access customers will pay for their instruments, which will list for $395,000 though early customers will receive a "modest" discount. West told investors last month that Solexa anticipates early-access instruments to be "priced at multiple hundreds of thousands of dollars each, and these will be real sales, not just test site placements."
In addition, Solexa will sell flow cells and reagents that will cost between $3,000 and $5,000 per run, depending on the application. But according to Filippone, Invitrogen is not making the flow cells that will be used in the Solexa instrument.
Solexa anticipates that customers will buy $100,000 to $200,000 worth of these consumables per instrument per year, CFO Linda Rubinstein told investors at a meeting earlier this month.
A Jump on the Competition
Meanwhile, Solexa's competitors, such as Agencourt Personal Genomics (APG) and Helicos BioSciences, are playing catch up. Both companies told BioCommerce Week sister publication Genome Technology this spring that they plan to begin marketing their next-generation sequencers in 2007, the first time they provided a timeline.
ABI announced two weeks ago that it would acquire APG for approximately $120 million in cash. And last week, ABI officials said the firm would offer early-access DNA sequencing services based on APG's new platform by the end of the year, followed by early-access instrument placements sometime in 2007 (see BioCommerce Week 6/7/2006).
Solexa rival 454 Life Sciences and partner Roche launched its Genome Sequencer 20 in February 2005. The firm, which has staked an early lead in the next-generation sequencing market, sold close to 30 units as of the end of March. Though many of the next-generation sequencing firms have not disclosed which companies are making reagents for them, reagents for 454's instrument are manufactured by its parent CuraGen.
In addition to these firms, several other start-ups, including Pacific Biosciences, Microchip Biotechnologies, AQI Sciences, GenoVoxx, and VisiGen Biotechnologies are working on competing sequencing technologies. None of these companies have disclosed yet who will supply them with reagents.
From Qiagen's perspective, the market does not provide much of an opportunity for reagent suppliers.
"This market is so early and immature, and there are currently only eight or nine companies in that field," Ulrich Schreik, Qiagen's vice president of business development, told BioCommerce Week. "It is very similar to the array field 10 years ago, [and] it's not a substantial business currently." He added, "All of these [next-generation sequencing] technologies require very tiny amounts" of reagents.
Edward Winnick ([email protected])