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Survey Indicates Life Tech Remains Leader of qPCR Research Market, But Faces Some Pricing Pressure


Life Technologies remains the market leader in qPCR instrumentation and reagents, and pricing concerns around its qPCR business due to new low-price reagents from rival Illumina are "unwarranted" due to a relatively "sticky" reagent market, according to the results of a recent survey of GenomeWeb readers.

In addition, the results of the survey suggest that most qPCR instrument users are satisfied with their current platforms, lending credence to recent reports from Life Tech that the market has matured, thus leading to a slowdown in instrument sales. However, customer spending on qPCR reagents is expected to spike over the next year, even though reagent pricing is expected to remain relatively stable, survey results indicate.

The survey, conducted in collaboration with equity research and investment firm William Blair & Co., focused on real-time and digital PCR instrument and reagent usage trends and pricing in the life science research market. Conducted over several weeks in September, the survey received 52 responses, 24 percent of which were from users in individual private investigator labs; 41 percent from core labs; 22 percent from applied markets; six percent from genome centers; and eight percent other.

A question about the qPCR instruments currently used in respondents' laboratories confirmed the expectation that Life Tech owns the greatest share of the qPCR market, a position it has held at least since 1996, William Blair noted.

More than 63 percent of unique survey respondents owned at least one Life Tech qPCR instrument, compared with 33 percent for Roche, and 21 percent for Bio-Rad. Other qPCR platforms cited included instruments from Cepheid, Qiagen, Idaho Technology, Agilent, Eppendorf, 3M/Focus Diagnostics, and Thermo Fisher Scientific.

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William Blair noted in its report that there are roughly 60,000 to 70,000 total qPCR platforms installed globally – about 30,000 of which, or 40 to 50 percent, are from Life Tech.

And, the majority of survey respondents – about 81 percent – indicated that their current instrumentation platforms have met expectations, suggesting that Life Tech may not yield instrumentation market share for the foreseeable future. However, this result also seems to indicate a slowdown in growth for the qPCR instrumentation market.

"Our survey corroborates commentary from [Life Tech] suggesting that qPCR is a more mature market and thus instrument sales are likely to continue to show low growth," William Blair noted. "Roughly seven respondents plan to purchase a new qPCR instrument in the near team."

Mirroring existing market share dynamics, William Blair identified four potential Life Tech instrument purchases – two ViiA 7 real-time PCR systems and two QuantStudio 12K Flex platforms – and one potential purchase of a Bio‐Rad system.

Survey respondents cited flexibility, data quality, well‐to‐well consistency, and available applications as the main criteria in purchasing a new instrument.

In terms of instrument pricing trends, the survey results seem to indicate that pricing for mid- and high-density qPCR instrumentation seems to be stable, with most respondents indicating that the cost of instruments in those two categories has remained flat over the last year — "although most respondents suggested that they pay less attention to instrument pricing unless they are looking to purchase new instruments," William Blair noted.

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"Compared with newer genetic analysis instruments such as next‐generation sequencers, which are offered by only a few vendors, there is a broad menu of qPCR instruments offered by more than 10 manufacturers, with various throughput and optical capability (the number of fluorescent dyes detected) to choose from," the report noted. "Thus, instrument price could vary depending on current promotions, existing relationship with vendors, and if a user is buying both instrument and reagents from the same vendor, which could result in a significant discount."

As an example, the report noted that pricing for Life Tech’s qPCR instrument portfolio ranges from $10,000 for its StepOne platform to between $90,000 and $190,000 for the QuantStudio 12K Flex.

However, survey results revealed some evidence of pricing pressure on low-density instruments, as a handful of respondents indicated that they have seen the cost of such platforms drop by 5 percent to 25 percent or more over the last year. And, while a few respondents indicated that pricing for these instruments has increased by as much as 10 percent in the last 12 months, none indicated a spike in cost of more than 10 percent.

"The results of our survey, although representing a relatively smaller sample size, point to some price pressure in the low‐density market, which based on our channel checks has been amplified by the recent introduction of Illumina’s Eco platform, priced at $10,000," William Blair noted. Illumina launched the Eco in July 2010 after announcing the acquisition of the platform's original developer, Helixis (PCR Insider, 7/29/2010). However, the company has not provided sales numbers for this platform in any of its quarterly earnings statements, and the results of the GenomeWeb/William Blair survey seem to suggest that uptake of the platform is still slow.

William Blair provides equity research on both Life Tech and Illumina, and part of its impetus for conducting the survey was to investigate whether Life Tech's stronghold in the qPCR market might be somewhat threatened, at least on the reagent side, particularly due to pricing pressure from other recently launched qPCR products from Illumina, a portfolio of low-cost qPCR reagents and "NuPCR" probes (PCR Insider, 7/26/2012).

Survey results indicate that the majority of qPCR reagent users have seen flat reagent pricing over the last 12 months, both for gene expression/quantification and genotyping reagents, although, the report noted, "with some evidence of downward pressure at the margin, particularly in genotyping."

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However, only one respondent plans to switch qPCR reagent vendors in the next 12 months – to Life Tech, according to the survey results.

"Efforts to validate new reagents can be cost-prohibitive, particularly for molecular diagnostic users and academic researchers focused on publication," William Blair noted. "Life’s TaqMan probe-based chemistry is well-known and supported by more than 10,000 peer‐reviewed publications; the company also provides a wide breadth of pre‐validated assays (over 4,000)."

Nevertheless, "cost is important" for researchers, the report noted, and as such it is "possible that a newer reagent entrant such as Illumina could drive pricing pressure in the PCR reagent market, although we believe that this will take some time to play out. In addition, with 7,500 qPCR instruments placed in clinics, Life has an advantage in aftermarket sales as well as its broad product base."

Interestingly, the report noted that Illumina had launched its NuPCR products outside the US through its distribution channels, but had yet to identify a US-based distributor for its products. After publication of the survey results, Illumina disclosed in its third-quarter earnings call that it had indeed identified a US distributor for NuPCR reagents and would provide more details in November (see story, this issue).

The survey revealed that future utilization trends for qPCR reagents are "encouraging" for vendors, with roughly 25 percent of respondents expecting reagent spending to be at least flat, and 68 percent expecting it to increase over the next 12 months, primarily due to increasing demand from customers initiating a new project or adding more qPCR instruments.

Respondents cited a broad range of application for qPCR reagent use in the coming year, including gene expression analysis, genotyping, mRNA quantification, next-generation sequencing library quantification, and validation of NGS/microarray experiments.

Early Days for Digital

The survey also took a glance at the newly emerging digital PCR market.

Indeed, results indicated a market "in its infancy," with only four respondents indicating that they owned a digital PCR platform – two from Bio-Rad, one from Fluidigm, and one unspecified. Five respondents said they intended to eventually purchase a digital PCR platform.

"One respondent has decided to remain on the sideline until the market is more settled, given the rapidly changing technology landscape in this field," William Blair noted. "Also, while a key feature of digital PCR is improved sensitivity and specificity, a number of respondents suggested that they do not need such high sensitivity at this point, and thus had a hard time justifying the adoption of digital PCR."

These thoughts were echoed by several attendees of Cambridge Healthtech Institutes' inaugural digital PCR conference held last week in San Diego (PCR Insider, 10/18/2012).

However, for current digital PCR users, survey respondents cited higher sensitivity, low limit of detection, and multiplexing capabilities as the top three reasons to adopt the technology.