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NIPT, Oncology to Drive NGS MDx Market Growth by 2015; Most Tests to Remain Targeted, Lab-Developed

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The market for next-generation sequencing-based molecular diagnostic tests is poised to grow more than tenfold between 2012 and 2015, driven by non-invasive prenatal and oncology tests, most of them targeted, according to a recent report from research firm DeciBio.

The report, which was published last month and covers molecular diagnostics in general, estimates that the worldwide NGS-based clinical testing market will grow from about $100 million in 2012 to approximately $1.2 billion in 2015.

While most of the report focuses on manufacturers of FDA-approved or CE-marked instruments and reagents for MDx, a special section is devoted to the emerging clinical NGS market, which relies almost entirely on laboratory-developed tests at the moment. As such, the report projects sales of NGS testing services rather than manufacturers' sales, based on interviews with experts and other data, such as test revenues from public testing firms.

The report cautions, however, that forecasts of the NGS MDx market are difficult because the extent of FDA regulation is still unclear, reimbursement has not been fully established, growth is expected to be large, many testing companies are private, and test prices are hard to predict due to the continuing decline of sequencing costs.

As of last year, NIPT and oncology testing constituted most of the NGS diagnostics market, and these two areas will continue to make up the vast majority of NGS-based testing in 2015, according to the report.

NIPT – under which the report includes pre-implantation genetic diagnosis – is expected to make up about half of the market by 2015, and oncology testing about a third. In addition, NGS-based diagnostic tests are bound to emerge in other areas, such as infectious disease, HLA typing, idiopathic diseases, preventive medicine, and other genetic diseases as well as pharmacogenomics, which together will form the remainder of the market.

Along with the increase of clinical NGS-based testing goes a greater penetration of next-gen sequencing instrumentation into clinical laboratories. By the end of this year, the report estimates, more than 1,000 NGS platforms will have been placed in clinical settings.

In terms of test methods, almost all clinical NGS testing conducted in 2012 was targeted, which includes gene panels and NIPT, according to the report.

In 2015, targeted tests will continue to make up about two thirds of the clinical NGS market, the authors estimated. But they said whole-exome testing will grab a substantial slice of the market due to decreasing library preparation costs and improved bioinformatics, and whole-genome as well as transcriptome-based testing will increase, too.

Regarding regulatory clearance, laboratory-developed tests will likely continue to generate the overwhelming majority of NGS MDx revenue by 2015, according to the report, with only a fraction coming from FDA-approved or CE-marked tests.

While the FDA's 510(k) clearance of Illumina's MiSeqDx system, along with two cystic fibrosis assays and a reagent kit, happened shortly after the report was published, this will not change its predictions significantly, as the approval was expected to happen in the near future, according to Stephane Budel, the report's lead author.

However, the future ratio of laboratory-developed versus FDA-approved clinical NGS tests will "really depend on FDA," he noted.

In addition, the report mentions that many clinical customers, such as mid-sized hospitals, "have indicated that they were waiting for FDA clearance before they would consider adopting an NGS platform for clinical use," and might bring next-gen sequencers in house as soon as FDA approvals happen.

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