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Solexa, 454 Help Academic Labs Ask Uncle Sam for Cash to Buy Their Tools and Services

NEW YORK (GenomeWeb News) – As academic researchers develop an appetite for next-generation DNA sequencing, companies such as 454 Life Sciences, through marketing partner Roche, and Solexa are taking steps to help them obtain government funding.
They recently encountered an encouraging event: Earlier this month, the NIH for the first time helped an academic lab pay for a next-generation sequencer through its high-end instrumentation program.
The average academic lab often has to beg, borrow, or steal to get its hands on new and costly technology, and next-gen sequencers are no different. And because these instruments have been making the rounds at trade shows and in peer-reviewed journals, they have generated some buzz in this demographic.
But given that these instruments typically cost between $400,000 and $500,000 dollars — not including reagents and personnel costs — not every sequencing-heavy lab or core facility will be able to afford one of their own.
Exacerbating this is the fact that instrument providers see academic institutions as a sizable customer base that could help drive revenue growth, and that government grants typically have lengthy application cycles. So some shops are helping potential customers tap Uncle Sam to obtain the funding they need.
“We have been working actively with prospective customers over the past year to support their grant applications,” Omead Ostadan, vice president for marketing at Solexa, said in a company conference call earlier this month. “We are optimistic that customers will have access to sufficient funds to purchase and incorporate our technology into their research in 2006 and heading into 2007.”
Government agencies such as the National Science Foundation, the National Cancer Institute, and the Departments of Energy and Defense, among others, have issued RFAs “that while not specifically targeted to next-generation sequencing can certainly be addressed using next-gen technology,” Ostadan told GenomeWeb News by e-mail.
Over the last year, Solexa has helped prospective customers compose their applications for funding for either Solexa’s sequencing service or for its instrument by “providing data, details of collaborative agreements, and quotations for system purchase,” he said during the conference call.
454 and Roche have also provided letters of support for grant proposals to PHS, NSF, the National Institute of Allergy and Infectious Diseases, and the National Human Genome Research Institute “to name a few” said Bill Spencer, 454’s director of worldwide systems sales. “Through our partners at Roche, potential buyers worldwide can have proof-of-principle experiments done as supporting documentation for specific uses of 454 technology in their research,” he told GenomeWeb News in an e-mail message. “This is one of the primary purposes of the 454 sequencing center.”
According to Spencer, the majority of 454 users are at academic or government research institutions, and core facilities are gaining in importance. “We have seen an increase in interested from this group,” he said.
Ostadan agreed, saying the academic segment “is quite important to Solexa, but so is the industrial sector. We expect both sectors to be significant contributors to our revenue. The ratio of their contribution to our revenue is likely to change over time, as one would expect.”
Have Uncle Sam Pay for It
The federal government maintains several grant programs that have helped labs buy capillary electrophoresis-based DNA sequencers in the past. These programs typically have lengthy application cycles and applicants must convince reviewers that the technology they covet can perform, especially if it is brand new.
Core facilities or other labs that give multiple users access to a machine can apply to programs from the NIH or the NSF to help pay for big-ticket instruments.
Earlier this month, for example, the NIH’s National Center for Research Resources gave a Stanford University team $543,750 to buy a 454 instrument under its high-end instrumentation program, which happened to be the first time the program helped buy a next-generation sequencer. The researchers plan to use the machine for microbial sequencing and HIV analyses.
The NCRR’s high-end program, which normally covers instruments that cost more than $750,000, runs every two years. The next time researchers can apply is September 2007, according to Program Director Marjorie Tingle. Awards are made the following year.
But Tingle said research teams could also obtain a sequencer in the half-million-dollar price range occupied by 454 and Solexa through the NCRR’s annual shared instrumentation grant program, which pays for tools that run between $100,000 and $500,000.
This year’s proposals for the SIG program are being reviewed this fall and will be announced in April 2007. To apply for the next round, to be awarded in 2008, researchers must submit their applications in March.
In the past, the SIG program has made numerous awards for DNA sequencers. Tingle said she does not believe an award for a 454 instrument has been made this April, the latest funding round.
To be eligible for either NCRR program, at least three major users of the instrument must be funded through the NIH. People are permitted to apply even when the instrument is not fully commercialized at the time their proposal is submitted as long as they provide a quote from the vendor, Tingle said.
However, “most of the DNA sequencing equipment that we funded trough the high-end or through SIG has been commercially available equipment,“ she said.
Applicants must demonstrate the instrument is sufficiently developed to be used in the settings of a core facility, Tingle said. “The majority of the users are not going to be DNA sequencing technologists. They are going to apply the instrument to their research, but they are not going to be developers of the instrumentation per se.”
Non-medical researchers can turn to the NSF’s Major Research Instrumentation program, which like the NCRR’s two programs provides funding for shared equipment. Generally, researchers can apply for instruments costing between $100,000 and $2 million under this program.
Most of this year’s awards, approximately 240 in all, are being made this month and next month. In the past, between five and 10 DNA sequencers have been awarded in a typical year, according to Helen Hansma, a program manager in the NSF’s biological sciences directorate. As of today, no next-gen sequencers have been funded through this program.
The next deadline to apply for MRI funding is in January. Awards will be made next fall.
It is possible to purchase brand new technology through NSF’s program. For example, it helped pay for at least two instruments in the past – both microscopes – that were “the first one ever, or the first one in the US,” said Hansma.
However, investigators applying for such early-stage products need to make sure the machine will actually be able to meet their needs, cautioned Joan Frye, who administrates NSF’s MRI program. “I have seen investigators dinked when they have asked for something that’s a little too nascent,” she said.

Julia Karow covers the next-generation genome-sequencing market for GenomeWeb News. E-mail her at [email protected]

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