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Preemptively Talking (Potential) Cuts

Reporting from Bangalore, Reuters' Esha Dey and Shravya Jain this week discuss the implications of a potential National Institutes of Health budget cut on the sequencing business. "Companies such as Illumina, Affymetrix and Life Technologies get 20 [percent to] 40 percent of their revenue from US government-backed research and are expected to take the biggest hit from a funding cut," Dey and Jain say, adding that "other, more diversified players in the gene sequencer market — expected to be worth $3.6 billion by 2015 — with lower exposure to the funding risk include PerkinElmer, Waters, Thermo Fisher Scientific and Mettler-Toledo." Cold Spring Harbor Laboratory's Michael Schatz tells Reuters that he has "submitted proposals to the NIH that scored in the very top percentiles and would have normally been unquestionably funded, but were not funded as submitted because of cutbacks." Schatz also said he "expects the downward trends to continue for several years, and said funding restrictions were limiting the number of new contracts awarded to gene sequencers," Dey and Jain write. They also suggest that NIH could see cuts of up to 8 percent amidst the planned overhaul of federal expenditures.

But Reuters notes that "while funding may be squeezed, it won't disappear." Macquarie Research analyst Jonathan Groberg tells the news organization that academic researchers "can't just not spend." Research institutes "still need to spend money because these government grants are such that if they don't meet one goal, they won't get the next leg of the grant," Groberg says.