NGS Survey Suggests Sequencing Market Continues to Grow, Reaches Beyond Academia, Government

NEW YORK (GenomeWeb) – A recent survey of current and potential users of next-generation sequencing, jointly conducted by Bank of America Merrill Lynch and GenomeWeb, suggests that demand for sequencing remains strong and NGS instruments are spreading outside of the traditional core academic and government markets.

The survey, conducted in March, had more than 300 respondents from academic and government labs, pharma and biotech, contract research organizations, and hospitals and medical centers, and covered both life science tools budget trends and DNA sequencing.

Of 285 respondents, 60 percent either had an NGS system in their own lab or used a core facility at their institution, and another 7 percent said they plan to bring NGS in house over the next 12 months.

Notably, almost half of the 182 existing users plan to purchase additional NGS systems within the next year, indicating that demand for sequencing continues to grow. Most of these respondents plan to add either a high-throughput sequencer or a benchtop NGS platform. A smaller number are interested in a nanopore sequencer from Oxford Nanopore Technologies.

The most frequently cited systems were Illumina's — in particular, respondents said they plan to add HiSeq 2500/3000/4000 instruments, followed by the NovaSeq 5000/6000, and the HiSeq X. In their analysis of the survey results, Bank of America research analyst Derik de Bruin and colleagues wrote that they were "pleasantly surprised" by the high interest in instrument types other than the NovaSeq, indicating that the NovaSeq may not be completely taking over the high-throughput sequencing market. The survey also found that a third of users who do plan to purchase a NovaSeq also want to keep their existing sequencing instruments.     

Also, although the majority of those planning to purchase new NGS instruments are in academia or the government, labs in other industries are also in the market for high-throughput sequencers, including pharma and biotech labs, contract research organizations and genomic service providers, and hospitals and medical centers. "This expansion into non-[academic and government] end markets is a positive indicator that the long process of market building is gradually progressing, further expanding the overall sequencing market," the analysts wrote.

Besides acquiring new sequencing systems, labs also plan to spend more on bioinformatics — of 140 respondents, almost 60 percent said they expect to increase their bioinformatics spending in the next 12 months. A large subset of these respondents said this additional spending will go towards hiring bioinformatics personnel.

The survey also found that, contrary to what has been suggested in the past, there is not a lot of overcapacity in the sequencing market. Only 35 percent of 166 respondents use their instruments at 40 percent or less capacity. Also, about two thirds of those users expect that utilization of their sequencing capacity will increase over the next 12 months.

Meanwhile, outsourcing of sequencing appears to become increasingly common: 41 percent of 258 respondents said they either currently outsource sequencing or plan to do so over the next year, for a variety of reasons and for many different types of projects. Of 92 users currently outsourcing sequencing, half said this involves most or all of their NGS work. Also, nearly half said they plan to increase their level of outsourcing over the next year.

"We believe that the growth of the overall sequencing market has been partially constrained by limitations on expertise and sequencing capabilities of individual labs, and the continued ramp in sequence outsourcing is serving to further expand the reach and size of the market and allow more projects to be undertaken," de Bruin and colleagues concluded.

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