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Following Cuts, Singular Genomics Shifts Focus From NGS to Spatial Analysis


NEW YORK – After cutting its workforce last month to reduce operating expenses, Singular Genomics Systems is deemphasizing its presence in the mid-throughput next-generation sequencing market and will instead focus on spatial biology applications.

The firm will still sell an instrument with sequencing capabilities and has committed to supporting its existing NGS customers, CEO and Cofounder Drew Spaventa said, but its priority is the recently announced G4X. This upgrade to its G4 platform enables sequencing of DNA and RNA in formalin-fixed, paraffin-embedded tissue slides as well as protein analysis and digital H&E staining, among other applications.

"The lane that we want to carve out is really on high throughput and lower plex," he said. "To my knowledge, there's not really any offering that's meeting that today." Other in situ spatial biology instruments may only be able to run a couple of samples per run. "What we're talking about, depending on the type of sample, is allowing someone to do anywhere from 10 to 40 samples on a single kit," he said, noting that a G4X can run four kits at a time.

Singular still plans to launch the G4X commercially by the end of the year. In the meantime, Spaventa said the firm is starting an early-access program as well as a service offering to provide access to the new capabilities. Singular has already run three technology access programs, he said. "The idea is to expand on those and start to offer services for a fee to generate early revenue and generate interest."

"I'm definitely excited, and the data up to now are very supportive. However, the success of an instrument is decided when it is deployed in the wild," said Ioannis Vlachos, director of the Spatial Technologies Unit, a lab dedicated to spatial tissue profiling at Beth Israel Deaconess Medical Center in Boston. Not only is he broadly interested in new spatial profiling technologies, he received the first G4 worldwide in 2022 and his facility uses it, and a recently-installed second instrument, for its in-house sequencing needs.

"If everything that is promised is true, I would see both [G4s] being upgraded," he said. "Having a system that can quickly produce large amounts of data for very large numbers of samples will support an extensive community of investigators that are currently underserved."

San Diego-based Singular went public in May 2021 prior to launching its G4 in December of that year, aiming to increase flexibility and lower sequencing costs for labs that weren't able to meet the sample demands of Illumina's production-scale instruments. Addressing spatial and single-cell analysis was always in its plans, but until recently, the company had been working on a separate instrument, previously known as the PX. Singular announced the G4X at the Advances in Genome Biology and Technology meeting in February.

The recent change in approach, announced March 18 on a conference call with investors following the release of the firm's fourth quarter and 2023 financial results, tacitly suggests firm was unsuccessful in its initial attempt to take on Illumina and other startups in the mid-throughput benchtop sequencing market. After a delayed rollout, Singular has placed two dozen G4s into labs as of the end of 2023. Along with the Q4 financial results, it announced a 20 percent reduction of its workforce while reallocating resources towards spatial biology and seeking to extend its cash runway.

"To be candid, there is a high barrier [to getting people to switch from Illumina,]" Spaventa said. "In sequencing, there are very clear metrics and very clear use cases right now. And there's competition and pressure on that market, especially in the academic setting, which is largely where new technologies are deployed."

"We still think the sequencing market is attractive, especially when we think about the application of sequencing for clinical diagnostics, but that takes time," he said. "That's a market and a business that gets built over many, many years."

Meantime, spatial analysis of both RNA and proteins has taken off, and the market shows signs of accelerating. According to a report from consulting firm DeciBio, the multiomic spatial analysis market is already worth at least $800 million this year is poised to grow to more than $2.2 billion by 2029.

"The current market is largely comprised of academic labs, contract research organizations, and reference labs," Spaventa told investors last month. "These labs need higher throughput and lower cost per sample. Current tools are limited."

In addition to the market opportunity and the differentiated offering Singular believes the G4X brings, spatial offers some "attractive" economics, he said. "Average sale prices on both the G4X instruments and consumables are expected to be higher than [for] the current G4 business," Spaventa noted during the call. "The ability to offer high throughput in the form of 10 to 40 tissue samples on a single flow cell translates to expected ASPs and margin dollars to be materially higher than current kits and significantly higher potential for consumable pull through."

"Singular appears to have a valuable technology that enables multiomic analysis — although the G4X has not been proven in the field yet," Canaccord Genuity Life Science Tools and Diagnostics Analyst Kyle Mikson said in an email. Though it will be challenging to take market share from more established players in spatial biology, "it is possible that customers will include the G4X platform in their evaluation processes for new 'omics' tools. In theory, this could impact the demand or sales funnel for the established companies," he added.

Vlachos noted that cost and throughput have been the two biggest determinants of success for next-generation sequencing instruments. "So far, we've seen this in spatial, as well," he said. "Even small differences can be important determinants for our instrument acquisition strategy."

Like Vlachos, Jasmine Plummer runs a research center devoted to spatial technologies, at St. Jude Children's Research Hospital. "I'm very interested in sequencing-based spatial [analysis], whatever that turns out to be," she said. Unlike Vlachos, she does not currently have a G4. "A sequencer is fundamentally an imager, so anybody thinking about that, moving the field forward, I'm very interested in," she said.

How Singular customers who bought the G4 primarily for its sequencing capabilities and are less interested in its spatial biology applications are taking the pivot isn't clear. Several other researchers with G4s in their labs declined to comment at this time.