Applied Biosystems expects the market for next-generation sequencing technologies to more than triple over the next four years, fuelling the growth of the overall sequencing market, which the company estimates will expand by about 40 percent over the next five years.
At the Leerink Swann Emerging Products and Applications of Life Science Tools roundtable conference in New York last week, an ABI official showed in a chart that the company expects the overall sequencing market — including both capillary electrophoresis and next-gen technologies — to grow from a current level of about $1 billion to more than $1.4 billion by 2011. Next-generation sequencing technologies will have an important share in this growth, with a predicted increase from $135 million to $450 million during that time.
While research laboratories with high-volume sequence needs are just beginning to use next-generation technologies, “CE will continue to be a fundamental technology, and particularly used in the commercial markets,” said Kim Caple, vice president and general manager for high-throughput discovery in ABI’s molecular and cell biology division.
At the conference, Caple presented ABI’s take on the sequencing market, and its expectations of how the company’s SOLiD platform will add to it.
The current size of the capillary electrophoresis — or Sanger sequencing — market is about $900 million, Caple said, divided almost equally between commercial and research applications. Commercial applications comprise forensics, human identification, clinical diagnostics, quality control, and food and safety testing, and make up about 55 percent of the total market. Caple pointed out that ABI has seen “significant increases” in the pharma QC market, and that food and safety testing “is also a very big area for the applied markets, and where we have seen growth.”
Research applications, such as de novo genome sequencing, medical sequencing, biomarker discovery, and genotyping studies, make up the remaining 45 percent of the CE market, she said.
ABI expects the commercial CE market to grow at a rate of 9.5 percent per year between 2007 and 2012, and between 5 and 7 percent per year between 2008 and 2010. On the other hand, the company predicts the research market for CE will decline by 7.2 percent per year between 2007 and 2012, and stay flat or decline up to 3 percent between 2008 and 2010.
The market for next-generation sequencing will likely grow from $135 million this year to a “total addressable market” of $450 million by 2011, according to Caple. More than $160 million of that represents an “incremental opportunity” to ABI’s sequencing business, she said, meaning that it will add to the market without taking away from the company’s capillary electrophoresis business.
About half of the projected $450 million in 2011 revenues will come from customers at small genome centers and core labs, and 45 percent from large genome centers. Only 5 percent will result from other users, such as pharmaceutical companies and agricultural firms, Caple predicted.
Users will apply next-gen technologies to a variety of tasks, some of which will replace Sanger sequencing applications, while others will complement Sanger, and yet others will be unique applications, potentially adding to ABI’s business.
Caple classified potential next-gen tasks as either short-read or long-read applications. While whole-genome sequencing of mammals, microbes, viruses, or fungi is better suited for long reads, methylation analysis, copy number variation studies, SNP discovery, medical sequencing, gene expression analysis, chromatin immunoprecipitation analysis, and small RNA discovery are suitable applications for short reads, she said. Metagenomics, BAC sequencing, confirmation sequencing, and comparative genomics are “a good integration of both long and short reads,” according to Caple.
ABI sees “incremental opportunities” for the SOLiD platform — which will initially generate 35 bp single reads — particularly for certain short-read applications “because they are not really currently done on capillary electrophoresis platforms,” Caple said.
“We believe we will be able to get up to anywhere from 6 to 10 gigabases from a single run.”
Like Illumina and Helicos, ABI believes its new platform has an edge because its output can increase in the future through technical improvements. The company recently decided to move up the date for the commercial launch of its platform to October after getting good feedback from early-access customers (see In Sequence 7/31/2007).
Currently, early-access users obtain between 1 and 1.5 gigabases of data per run, Caple said, and “our research labs are currently seeing three gigabases from a single run off the system.”
The company plans to increase this output further in the future “simply by packing more beads on the slide,” Caple said. “We believe we will be able to get up to anywhere from 6 to 10 gigabases from a single run.”
In addition to increasing the output, ABI thinks the high data accuracy of its platform can help lower the cost of sequencing projects, citing its proprietary two-base encoding error-correction method. However, the company has not yet published a study in a peer-reviewed journal that demonstrates the system’s accuracy.
Caple pointed to the company’s service and support infrastructure as another advantage in the sequencing market. Worldwide, ABI has more than 14,000 DNA sequencers installed, and its sales, service, and support staff totals over 2,000, including a field sales force of 880 and a field service force of 770. Such support is important because “it’s not necessarily a snap of the finger to get these platforms up and running,” she added.
Caple also mentioned that ABI conducted a market-research study for next-gen sequencing and found that customers care most about accuracy, throughput and coverage, read length — at least 35 bp for short reads, and more than 200 bp for long reads — project cost, and robustness of the instrument, measured in down time and success rate of runs.