This article has been corrected to reflect the accurate pricing of Illumina's 1M BeadChip.
While the market for expression arrays is not growing as fast as the genotyping or next-generation sequencing markets, Illumina and Affymetrix both said last week that they see opportunities for further growth in the gene expression sector, via digital gene expression and clinical trials, respectively.
Christian Henry, Illumina’s chief financial officer, told investors at the Piper Jaffray Health Care Conference in New York last week that the company believes the gene expression market will grow by nearly a third in coming years due to adoption of the firm’s digital gene expression applications.
According to Henry, Illumina currently lags behind Affymetrix and Agilent Technologies in the gene expression market, which the firm estimates to be worth around $700 million.
However, Henry said, “with some of the new technologies we’ve brought out, especially digital gene expression, we think that market can grow again and we estimate that at some point it will be a $900 million market.”
Illumina launched two digital gene expression applications for its Genome Analyzer sequencing platform earlier this year. The first, Digital Gene Expression for Tag Profiling, can generate profiles for any transcript from any gene in any organism. The firm’s Digital Gene Expression for Small RNA Analysis application supports researchers interested in the discovery of small non-coding RNA, according to Illumina.
Illumina also sells gene-expression array products for human, mouse, and rat studies, but the company believes that DGE has a technical superiority that will enable it to rejuvenate the array-dominated expression market, Henry said.
“Digital gene expression is the science of being able to actually count the transcripts and get a digital result for your experiment,” Henry explained at the conference. “We believe this will be a very important application in this market over the next few years.”
While Illumina is touting its sequencer-based expression applications as a more reliable alternative to so-called analog arrays sold by rivals Affy and Agilent, Doug Farrell, Affy’s head of investor relations, told investors at the same conference that future growth in the expression market will be driven by clinical trials, some of which will be performed at Affy’s CLIA-approved lab in West Sacramento, Calif.
“In the field of gene expression, we think the clinical setting is going to be an important growth driver for us,” Farrell said at Piper Jaffray.
Farrell said that Affy has been running expression experiments in its lab for some of its diagnostic partners since the first quarter and that the company now has the capacity to run large sample volumes for pharmaceutical clinical trials.
“These studies tend to be fairly lumpy and a lot of pharmaceutical companies have been looking to outsource them,” Farrell said. “There are many ebbs and flows in the workflow, and pharma has found it more efficient to outsource and this is an area that we have decided to capitalize on,” he said.
Farrell did not provide any estimates for what Affy expects in terms of gene expression market growth.
While both Illumina and Affy predict an uptick in the gene expression market over the next year, most attention is on their competitive genotyping products. In the second quarter Illumina launched its Human 1M BeadChip and Affy debuted its 1.8-million-feature SNP 6.0 array. Both chips offer SNP and copy number variation content, and both are targeted for use in genome-wide association studies.
“This is a market that we created and where we launched the first genome-wide products already in 2003.”
During his presentation, Illumina’s Henry said the company predicts the market for array-based genotyping to grow from $600 million today to around $1 billion in coming years. He said that the market will continue to expand as the cost of genotyping decreases and Illumina continues to diversify its product portfolio.
“One of the reasons why the genotyping market has been growing so rapidly is because we have been able to drive the cost of genotyping down dramatically,” he said. “We are pushing hard for this to continue and to drive the cost per data point down.”
According to Henry, Illumina is the “leader” in the market for genome-wide association studies, which he estimated to be around half of the overall genotyping market. Henry also said that the entire genotyping market is growing on the order of 30 percent to 50 percent annually and that “over the next several years we expect genotyping to be a billion dollar market opportunity.”
Affymetrix’s Farrell said that his firm similarly envisions strong growth in the genotyping marketplace driven by its SNP 6.0, which he claimed is the “most comprehensive product on the market for doing such studies.” While Illumina claims to be the market leader in genome-wide association studies, Affy took credit for inventing the market in the first place.
“This is a market that we created and where we launched the first genome-wide products already in 2003,” said Farrell. He also said that the $500 price tag for Affy’s 6.0 gives it an edge in the market over Illumina’s Human 1M, which usually sells for between $580 and $650.
Illumina’s Henry, however, argued that the 1M is the “premium product in this market” and that “if you look at the genetic coverage of our HumanHap550 product, it is directly comparable to 6.0.”
Henry added that Illumina has the advantage of “flexibility and modularity” in the market, noting that Illumina offers multi-sample format chips, while Affymetrix does not. However, both Farrell and Henry declined to speculate on what the next generation of genotyping arrays might look like.
Farrell said that many Affy customers are actually using previous generations of its SNP chips because the 6.0 gives them unneeded coverage. The company also has been recommending customers use the 6.0 in replication studies to confirm their results.