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Launching SOLiD, ABI Faces Competition, Especially From Sequencing Rookie Illumina

Applied Biosystems last week formally launched its SOLiD next-generation sequencing platform at the American Society for Human Genetics annual meeting in San Diego.
The company, which also used the conference to provide an outlook on the market for and future improvements to its system, hopes that the new platform will reinvigorate its sluggish DNA sequencing business.
That business segment, which represented 26 percent of ABI’s total revenue in its first fiscal quarter 2008, declined by 2 percent compared to last year’s first quarter and is expected to show “modest growth” during fiscal ‘08, according to the company [see accompanying brief, this issue].
But the SOLiD will face some stiff competition, especially from Illumina’s Genome Analyzer, which has been on the market since the beginning of the year.
“I think about the two platforms as being appropriate for the same application space. It’s not obvious to me that one has application advantages over the other,” Chad Nusbaum, co-director of the genome sequencing and analysis program at the Broad Institute, told In Sequence by e-mail last week. He noted that it is still too early for a verdict.
The Broad Institute is one of an undisclosed number of early-access SOLiD users to have received an instrument since ABI started the program in June (see In Sequence 6/5/2007), and it is also a robust collector of other next-gen sequencers. As of August, beside the early-access SOLiD instrument, the institute owned 16 Genome Analyzers and three 454 Genome Sequencers.
“The true test will come once [the SOLiD and the Genome Analyzer] are up and running robustly for a while and we can see how they compare on base accuracy and per-base cost,” Nusbaum said.
Arend Sidow, an assistant professor at Stanford Medical School and another early-access SOLiD owner, declined to comment on his experience with the platform, citing a confidentiality agreement with ABI.
Perspectives, Plans, and ‘Bakeoffs’
ABI began shipping the system to non-early-access customers during the first week of October.
“We are pleased with the early order rates and diversity of more sophisticated sequencing customers, including genome centers, core academic labs, and commercial service labs from various parts of the world, placing orders for SOLiD,” ABI executive vice president Mark Stevenson said during the company’s quarterly earnings conference call last week.
So far, ABI has seen demand for the SOLiD system from genome centers as well as other “higher-volume” large laboratories and core labs. The company has also seen interest from pharmaceutical companies, although these might turn to sequencing service providers rather than purchasing their own systems, Kim Caple, vice president and general manager for ABI’s next-generation sequencing business, told investors at the ASHG meeting last week.
Some would-be customers are requesting “bakeoffs,” or head-to-head competitions between ABI’s and Illumina’s systems, she said, while others are “happy just looking at other people’s data” or calling customers who already have a system in place in order to make a purchase decision. “We are in a position to manage each situation appropriately, so we compete and win,” she said.
That includes flexible pricing. ABI has cited a list price of $600,000 for its SOLiD instrument and ancillary equipment, but some customers can expect a discount. “We don’t have a blanket promotion,” Caple said, adding that discounts and trade-ins are possible. “Of course every situation is going to be a little bit different.”
ABI is hoping to cash in on reagents: “Running full out,” Caple said, “we expect [each] SOLiD system to generate somewhere between about $175,000 and $250,000 a year in reagent [revenues].”
In terms of applications, ABI sees promising areas in structural variation projects, as well as transcriptome analyses and tag sequencing, according to Caple. The mate pair capability with various insert sizes makes the system particularly suitable for assessing structural variations, she said.
According to the Broad’s Nusbaum, both the Illumina and ABI platforms “are great now for tagging and counting applications,” though he is planning to expand their use to other applications over the next few months.
But SOLiD is not ABI’s last answer to the sequencing market. “This is not a $1,000 genome technology,” Caple noted. “None of the currently commercialized systems are $1,000 genome technologies. We will need single-molecule kinds of technologies to achieve that.” SOLiD, she said, will be able to hit the $100,000- genome mark.
ABI has its “own internal as well as external investments” in the next-next generation technology already, but “some major technical hurdles” remain before nanopores and other single molecule technologies can become a reality. “We do believe that from a commercial standpoint, it’s further out than five years,” Caple said.
At the moment, the platform can generate up to 4 gigabases of sequence data per run, but the output is expected to more than double to 10 gigabases per run over the next 12 to 18 months. She said ABI plans to achieve this by further improving the bead enrichment following the amplification step, by packing beads more tightly on the slide, and through software enhancements.
Illumina, on the other hand, currently specifies an output of 1 gigabase per run with single reads, which will double with paired reads, currently in beta testing. In the near term, it plans to increase the output of its Genome Analyzer to 4 gigabases.
“SOLiD is promising a greater yield, but we don't yet know how much of that will be high-quality data,” Broad’s Nusbaum said.
Caple also pointed to other areas in which the SOLiD system can improve, notably the emulsion PCR-based sample-prep step, which she acknowledged is more cumbersome than Illumina’s cluster amplification.
“From a total workflow standpoint, right now, yes, it’s harder to do, and our customers would tell you that,” she said. “They would also tell you, though, that at the end of the day, what’s most important to them is quality, throughput, and cost. And they are willing to fiddle a little more upfront if what they get at the back end is really good quality data.”
In addition, she said, ABI is currently working on “a variety of different ways of automating the ePCR,” which the company hopes to implement over the next year or so.
According to Nusbaum, a more labor-intensive sample prep “just becomes a part of the cost comparison” of the entire processes.

“At the end of the day, what’s most important to [customers] is quality, throughput, and cost. And they are willing to fiddle a little more upfront [with a difficult emulsion PCR-based sample-prep step] if what they get at the back end is really good quality data.”

Caple also admitted that the SOLiD platform has some GC bias during amplification, but said that such a bias “is a factor in any technology that involves amplification,” including other next-generation sequencing platforms. “We do have strategies for taking care of that, both in the library prep methods as well as in certain improvements to the chemistry,” she said.
Nusbaum confirmed that “all three machines” — ABI’s, 454’s, and Illumina’s — have measurable GC biases,” however he has not compared them side by side.
Finally, ABI is working on increasing the read length of the system from the current 35 bases and has already reached 45 bases internally. “There is no technical hurdle,” Caple said. “It’s just a question of the number of cycles and the quality of the reads.”
Challenges that early-access customers have experienced, according to Caple, are mostly centered around the data quantity and pipeline workflow. “To get 4 gigabases of data, you are producing roughly 16 terabytes of imagine data,” she said, and customers need to figure out whether and how to store that much data.

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