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Survey Finds Mixed Funding Outlook Among Genomics Researchers

NEW YORK (GenomeWeb News) – While the outlook for genomics-related funding is modestly positive in the near-term, expectations turn progressively more negative moving forward, a survey conducted by investment firm Mizuho Securities in collaboration with GenomeWeb found.

The 26-question survey taken at the end of the first quarter suggests that the approval of the 2012 National Institutes of Health budget at the end of 2011 has created mild optimism about funding for the rest of this year — but more angst surrounds funding for 2013 when the possibility of an 8 percent cut to funding looms.

The survey provides a glimpse into researcher opinions about the funding environment, which in turn may affect their purchasing decisions, and outlines user attitudes about genomics-related technologies.

On the funding side, the survey mirrors in part the survey taken at the end of the fourth quarter 2011 by Mizuho that also found positive prognostications for 2012 funding turning pessimistic for 2013. But while the current survey found that expectations for 2012 were essentially unchanged from the earlier survey, expectations for 2013 have worsened from the earlier one.

Fifty-nine respondents to a question about funding changes in the current survey said that they believe funding for full-year 2012 would improve .1 percent, compared to flat expectations expressed in the earlier survey. For 2013, though, expectations are that funding will shrink 1.1 percent, up from a .6 percent decrease expected in the Q4 2011 survey.

Mizuho analyst Peter Lawson said that the deterioration in expectations for 2013 is expected as NIH may see an 8 percent cut in its 2013 budget and as Europe implements austerity measures to address its budget woes. He added that the results reflect similar trends Mizuho found in its surveys about the academic and drug discovery spaces.

For the second quarter of 2012, respondents in the genomics survey said they believe funding will be up 1 percent, compared to expectations that funding during the first quarter was down .4 percent.

Lawson said that overall impressions in the genomics market for the Q1 survey were "slightly negative" though still better than outlooks expressed in his firm's academic and drug discovery surveys.

"Respondents' outlook for the industry as a whole for 2013 weighed on their sentiment the most," he said in a report.

As in the prior survey, cancer research, followed by translational research, is expected to garner much of the funding dollars over the next 12 months, while neurology research had the highest jump, with 35.4 percent of respondents saying they expect it to receive large increases in funding, compared to 24.1 percent in the earlier survey.

Addressing where they will direct their spending during the next 12 months, respondents favored reagents — with spending anticipated to increase 1.7 percent — over equipment, where spending is expected to drop 1 percent over the same period. Spending on personnel is estimated to increase .1 percent, the survey found, compared to a decrease of .4 percent in the fourth-quarter survey.

On a technology standpoint, not surprisingly, much of the spending will be going toward sequencing. Next-generation sequencing ranked highest among the 12 technologies covered by the survey in terms of technologies expected to see increased spending in the next 12 months. Additionally, RNA sequencing ranked third, single-molecule sequencing ranked fourth, and nanopore sequencing ranked fifth.

Nanopore sequencing, in particular, saw the biggest bump in expected funding compared to previous surveys, a development that Lawson noted as a positive for Oxford Nanopore Technologies, a privately held UK-based firm that is also largely responsible for the sudden clamor over nanopore sequencing.

At the Advances in Genome Biology and Technology annual conference in February, the company unveiled two instruments, including one called the MinIon that is the size of a USB memory stick and will cost less than $900. Both platforms are expected to launch later this year, according to GenomeWeb Daily News' sister publication In Sequence.

Informatics also is expected to benefit from increased spending during the next year, ranking second in the survey. Spending on digital PCR, gene expression arrays, and microarray-based genome-wide association studies, however, are all expected to decrease, according to respondents.

With interest high in next-gen sequencing, Illumina and Life Technologies were also named the top two vendors from which respondents said they will buy products in the next 12 months. The next group of vendors listed by respondents were Fluidigm, Complete Genomics (which provides services only), Becton Dickinson, Qiagen, Thermo Fisher Scientific, and Waters.

Ninety-six percent of the respondents said they use DNA sequencing and 43 percent plan to buy a sequencer in the next 12 months.

Among respondents who have a next-gen sequencing platform, 58 percent of the 38 respondents said they have an Illumina system. Life Tech was next at 23 percent, followed by Roche at 13 percent, and Pacific Biosciences at 6 percent.

In terms of platforms that they are considering purchasing, 38 percent of respondents each said they would buy an Illumina MiSeq or an Ion Torrent PGM.

Interest in systems that are expected to hit the market in the next 12 months was greatest for Life Tech's Ion Proton, followed by Oxford Nanopore's GridIon, then Illumina's HiSeq 2500, and Oxford's MinIon.

Last week, Roche abandoned its pursuit of Illumina, which repeatedly turned down offers of $44.50 per share and then $51 per share to be acquired by the Swiss pharmaceutical and diagnostics giant. In light of that, "we view the technology interest pointing toward rival new products as particularly pertinent," Lawson said.

A total of 81 individuals responded to the survey, with 75 percent answering each question. About 74 percent of respondents work in a government/academic setting, and 12 percent work in a commercial environment.

Approximately 58 percent are from the US and Canada, 25 percent are from Europe, 7 percent from Australia/New Zealand, 4 percent from other parts of the Americas, 2 percent each from China and Japan, 4 percent from other areas of Asia; and 2 percent from other parts of the world.