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Report Says Benchtop Systems Will Drive NGS Growth as High-Throughput Market Nears Saturation

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By Monica Heger

The next-generation sequencing market is poised to grow at a rate of 17 percent per year over the next four years, reaching $2 billion in 2015, according to a recent report by DeciBio, a Los Angeles-based market research firm.

The report, published last month, analyzed the entire next-gen sequencing market, including growth drivers, key applications, sequencing companies, and products. It projected that the largest revenue drivers would be growth in desktop instruments, reagent revenue, and sequencing services.

In particular, the authors — who interviewed 34 experts in the field, including representatives from large genome centers, academic labs, and industry — concluded that the introduction of desktop sequencers like the Ion Torrent PGM and Illumina MiSeq will be a primary growth driver for the market.

Next-gen sequencing has to date been dominated by high-throughput systems, but DeciBio projects that lower-throughput instruments will drive sequencing growth over the next four years, with revenues from benchtop sequencers (including instrument sales and reagents) growing 60 percent to 70 percent per year.

By 2015, experiments on benchtop sequencers are estimated to capture almost half of the market.

While the report estimates that the total number of next-gen placements is currently between 2,000 and 2,500, desktop systems could contribute to rapid growth of the NGS installed base. The authors believe that by 2015, total NGS systems could surpass 10,000, approaching the 15,000 or so Sanger instruments that are currently installed worldwide.

Illumina's $125,000 MiSeq and Life Technologies' $50,000 Ion Torrent PGM will likely remain the primary two desktop sequencers. According to DeciBio partner and report author Stephane Budel, of the 10 interviewees who commented on the PGM and MiSeq, around two-thirds had a "strong preference" for one machine over the other, with around one-third of respondents saying that there "would be room for both."

Ultimately, the report's authors estimated that by 2015 the PGM could capture 51 percent of the benchtop sequencing market and the MiSeq could take 41 percent, with Roche's 454 Junior making up the remaining 8 percent.

Budel conceded, however, that there are still a lot of unknowns, including whether the PGM will scale to the extent that the company has projected.

High-Throughput Sequencing Nears Saturation

While these desktop instruments will play a major role in driving growth in the next-gen sequencing market, the DeciBio report projects that revenues from instrument sales in general are expected to stay flat through 2015, while reagent sales and services will capture an increasing portion of the sector. Reagent sales are predicted to grow by around 30 percent and sequencing services by more than 30 percent per year.

Thus, the number of desktop instruments that are placed in the next two years will play a key role in determining companies' market share for the next four years, said Budel.

While large genome centers have driven the growth of the sequencing instrument market to date, these centers are already well-equipped and are facing funding constraints (IS 12/6/11). As a result, they are unlikely to continue placing large orders for instruments costing several hundred thousand dollars.

Subsequently, growth will come from smaller genome centers and core labs that opt for the benchtop machines.

The market for high-throughput instruments is getting close to saturation, with Illumina's HiSeq the dominant system, said Budel. As a result, it is becoming harder to place more of those instruments.

Funding constraints in academia have also played a role in the slowdown of instrument sales. While DeciBio projects the entire next-gen market will grow at an annual rate of 17 percent over the next four years, academic spending is only expected to grow by 11 percent per year, he said.

The report's findings are in line with the results of a survey of academic and industry researchers conducted in October by GenomeWeb and investment firm Mizuho Securities, which found that 42 percent of the 94 respondents were not likely to buy a new sequencer at all over the next 12 months (IS 10/25/2011).

Furthermore, for those researchers who were looking to buy a sequencer in the next year, HiSeq, Ion Torrent, and MiSeq were the platforms respondents were most likely to add.

Similarly, a survey of 41 lab directors conducted in November by investment bank Leerink Swann found that labs plan to purchase fewer sequencers over the next 12 months than they did over the last 12 months.

Results of the Leerink Swann survey also indicated that planned HiSeq purchases fell to 12 from 32 in the prior 12 months, while planned desktop sequencer purchase increased to 40 from 33 in the previous 12 months.

Applications

The DeciBio report projects that transcriptome sequencing and ChIP-seq will be the two fastest growing applications of next-generation sequencing.

In particular, RNA-seq is projected to replace microarrays for gene expression analysis in the next three to five years, said Budel.

Due to the dropping cost of sequencing, RNA-seq currently runs around $200 to $300 per sample, and because it offers so much more data than microarrays, the "method is expected to significantly affect usage of RNA microarrays in the next two years in academic settings," according to the report. Additionally, the main hurdle of RNA-seq — the lack of standardized and reproducible methods — has largely been overcome in the last few years.

Budel added that in the next few years there will be "little reason to run microarrays for the purpose of looking at gene expression."

These results are also in line with the GenomeWeb/Mizuho survey, in which a net of 62 percent of respondents said they plan to increase spending on RNA-seq over the next year, while a net of 34 percent of respondents said they plan on spending less on gene expression arrays over that time.

Following close behind RNA-seq is ChIP-seq, said Budel. ChIP-chip experiments have been increasingly migrating to next-gen sequencing in the last couple of years as methods have been refined.


Have topics you'd like to see covered by In Sequence? Contact the editor at mheger [at] genomeweb [.] com.

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