By Julia Karow
Following its initial public offering last month, Complete Genomics is working on filling its order books for 2011 to match its increasing sequencing capacity. And while the current demand for its whole human genome sequencing service primarily stems from researchers, the company predicts clinical customers will become increasingly important for its business as prices come down.
Last month, Complete raised $54 million in its IPO (IS 11/16/2010), which it said will support it for more than 12 months.
In early 2011, Complete Genomics expects to be able to sequence about 400 human genomes per month — a goal originally scheduled for the end of 2010 — and the firm is currently ramping up its sales, marketing, and support teams to secure more orders. "That's one of the major things we're doing, expanding the sales organization to be able to fill the capacity next year," CEO Cliff Reid told In Sequence last week.
During the third quarter, the company delivered 300 human genomes to customers, and as of Sept. 30, it had another 800 genomes on order. At the moment, the company has 35 customers, Reid said, not much different from February, when it had orders from more than 30 customers (IS 2/23/2010).
In the meantime, the company is adding to its service offering. Last week, Complete Genomics said its customers will now receive copy number variation and structural variation results, in addition to single nucleotide variants and small insertions and deletions (see New Products, this issue), which will be particularly important for analyzing cancer genomes.
The company developed the software for analyzing CNVs and structural variants while studying a lung cancer genome, published earlier this year in collaboration with researchers at Genentech (IS 6/1/2010).
Sometime in 2011, Complete Genomics plans to add chromosome phasing, a method currently in development that will allow it to distinguish between parental chromosomes. Reid said that prior to commercializing the technique, Complete will likely describe it in a scientific publication.
The company has also been working on reducing the error rate of its sequencing method — according to its website, the consensus error rate is 1 in 100,000, or an accuracy of 99.999 percent — through unspecified technical innovations of its instruments, biochemistry, and improved assembly software. Upcoming publications will support the lower error rate, according to Reid.
In addition, the company is "considering" additional ways of characterizing human genomes — such as methylation or transcriptome sequencing — but has no timeline yet for introducing these.
Exome sequencing, however, despite its current popularity in a variety of human genome research studies, is not on the firm's agenda. "We think that exome sequencing is kind of a short-term project design that is likely to diminish significantly as the price of complete human genome sequencing comes down," Reid said. "We do certainly recognize that there are projects underway today, but we think in the long run, the significant majority of these projects will be replaced by complete human genome sequencing, due to the added information and added value that's generated by sequencing the DNA outside of the exome."
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At present, the company's average price for a human genome is $10,000, he said. Pricing depends on volume: earlier this year, prices ranged from $5,000 to $20,000 per genome, differing according to the size of the project. This is in line with the pricing of Complete's competitors. For example, Illumina said recently that its Genome Network offers human genomes for research "routinely" for under $10,000 (IS 9/21/2010).
Researchers provide the main demand for Complete Genomics' service right now. But Reid predicted that as soon as prices become comparable to those of "major genetic tests" — such as Myriad's $3,000 breast cancer susceptibility test — the clinical market will become significant. Part of that market will require Complete Genomics to become CLIA certified, he said, and "in the not-too-distant future, we will certainly be a CLIA-certified lab." But the company has no plans to get into genome interpretation, which it wants to leave up to partners.
It also has no plans for broadening its business model beyond fee-for-service, which it believes will take it to profitability. "We learned that customers find that a very comfortable model," Reid said. "We own the technology, and our customers own the data. …We think that's a business model that will continue for years to come."
As prices come down, human genome sequencing is expected to become "a very high-growth market," Reid said, and the company is still "keenly interested" in opening satellite genome centers in other locations around the world.
He acknowledged that the market has attracted a number of competitors — including Illumina and BGI — and "will continue to attract new competitors," but he believes Complete Genomics has "a very advantaged position" because its technology provides better performance for human genome sequencing than others and is solely focused on this application.
Have topics you'd like to see covered by In Sequence? Email the editor at jkarow [at] genomeweb [.] com.