Next-Generation Sequencing market: are we feeling a real wind of change or is it simply the last breath of declining players?

Besides the soap opera concerning the Illumina/Pacific Biosciences acquisition that we have already covered in the article Illumina and PacBio, or the Next-Generation Sequencing market’s Romeo and Juliet, the past two years and especially the past few months have seen plenty of exciting news in the sequencing area. Following its recent reports Next-Generation Sequencing & DNA Synthesis 2019 and Cameras for Microscopy and Next-Generation Sequencing 2019, Yole Développement (Yole) offers an overview of the main events on the business side and on the technology side, along with an analysis of what this could mean for the future.

In October, Qiagen announced the discontinuation of its GeneReader clinical sequencing instrument, four years after its launch. Though Qiagen was not the largest sequencing player, it is worth noting another large diagnostic player is stepping back from sequencing after Roche’s discontinuation of the 454 sequencer. Qiagen had intellectual property (IP) infringement troubles with Illumina soon after its U.S. platform launch and had to develop a new sequencing chemistry before launching it again in 2017. This certainly did not help the company establishing a solid installed base of instruments. It sounds like a defeat for Qiagen, but in the meantime the company announced a 15-year collaboration with Illumina, where the former will develop kits for different therapeutic areas, focusing on clinical use of Illumina’s instruments. It looks like a very good compromise for Qiagen, given Illumina’s huge footprint in sequencing and growing presence in clinical applications. On the other hand, it is definitely a sign that it is very difficult to compete with Illumina, which now has seen off many other sequencing players. As of today, Oxford Nanopore (ONT), Thermo Fisher, BGI, and Pacific Biosciences remain. We can also consider SeqLL, running a service-only business from the spectrum of defunct Helicos’ machines, and China’s Direct Genomics, which is said to have launched a sequencer on the basis of some Helicos IP. And all of them, except BGI, have focused on market niches where they don’t directly compete with the giant. Future newcomers, be prepared, Illumina might not give you a second try.

In the meantime, there are interesting developments which might announce a redistribution of the cards. First, Oxford Nanopore has released the PromethION instrument which now enables it to compete in the high-throughput sequencing space. Coupled with big improvements in read accuracy, this now makes the company a serious player for the years to come. At the technology level, the nanopores on ONT’s flow cells are currently biological nanopores. The company is considering shifting to solid-state nanopores coupled with field-effect transistor (FET) sensing in future flow cell versions, but there is no indication of the timeline. ONT is certainly waiting for higher production volumes to make it sustainable. The sequencing throughput would be greatly increased, with more than one million sensing channels per flow cell, according to the company.

Still on the long-read side of the market, PacBio is offering an eightfold improvement in throughput with the release of its Sequel II instrument and new 8M cell which contains eight million nano-wells instead of only one million in the previous version. However, as discussed in our previous article, PacBio might either be acquired by Illumina if the antitrust bodies agree with the merger, or remain alone and encounter the threat of bankruptcy in the coming years.

Substrates used in sequencing consumables - Yole Développement

On the short-read side, Thermo Fisher recently announced a new instrument, the Ion Torrent Genexus. This new instrument seems to come with a new flow cell and is still focused on the clinical market, like the former Ion Torrent systems. Thermo Fisher claims the workflow is easier and more automated. The company is certainly aiming at making it more accessible to minimally-trained users to increase adoption by small centers and thus enlarge its customer base.

And now, there comes a new semiconductor sequencing technology, also with an electrical detection scheme. After years of silence, GenapSys finally made a big noise in 2019. The company just announced it raised $90M and launched the U.S. commercialization of its semiconductor sequencing system, and plans to expand to other countries in 2020. It is the first product introduction of a new sequencing company since ONT and BGI in 2015, if we except China’s Direct Genomics which has not been officially confirmed and seems local only. GenapSys’ technology was in the pipeline for a long time, and it is good to finally see it making it to the market instead of sadly joining the large list of stillborn sequencing technologies. GenapSys’ instrument costs around $10,000, making it available for smaller labs. It currently runs with CMOS flow cells having one million and 16 million sensors, with a 144 million sensor chip in development. The sequencing kits, including a flow cell, are sold for $300. This makes it quite affordable, though GenapSys is positioned on the low-throughput side of the market, a little bit higher throughput than Illumina’s iSeq100 with the 16 million sensor chip, claiming low cost and flexibility.
There are numerous other companies developing sequencing technologies, like Omniome and Roswell Biotechnologies. It will be interesting to observe which ones finally make it to the market. At Yole, we actually identified around 50 companies developing sequencing technologies, or ones that are applicable to sequencing, and described them in our Next-Generation Sequencing & DNA Synthesis 2019 report.

Last but not least, BGI released its DNBSEQ-T7 high-throughput sequencer, putting some pressure on Illumina and its NovaSeq at the price level. The Chinese company claims to be approaching $500 per genome. Five years after the $1,000 genome barrier was broken, the race towards the $100 genome continues.

Overall we observe two races. The first one is towards very high-throughput sequencing, with the goal of generating ever more sequencing data at the lowest cost per gigabase possible. Illumina is clearly dominating that one today, but BGI and Oxford Nanopore have interesting presences that could become worrying for the sequencing leader in the future. The second race is towards making sequencing more affordable without having to run a massive amount of samples at full capacity, and thus making sequencing accessible to an enlarged audience. This is where we identified the most interesting technology trends, due to the effort towards commoditization of the sequencers, which we analyze in details in our recent report Cameras for Microscopy and Next-Generation Sequencing 2019.

Technology Roadmap for Next Generation Sequencing - Yole Développement

It all started with the release of the Illumina iSeq100 beginning of 2018, a switch from glass flow cells to a CMOS chip that could appear strange in a first place. In fact, Illumina removed all the expensive optics from the instrument, significantly reducing its price, so that by making it more affordable it could place more instruments. Consequently the company is selling higher volumes of these consumables with the CMOS image sensor on it, making these more affordable as well. This strategy works only if you are able to produce and sell enough consumables to make their fabrication inexpensive. Maybe it was also PacBio’s approach with the Sequel and Sequel II chips, which also have a CMOS optical sensor onboard. However PacBio did not really manage to drive volumes up and is certainly struggling with cost reduction.

BGI’s recent announcement of a similar instrument with no optics, running with a CMOS chip, confirms the trend. It looks very much like Illumina’s iSeq100 and we can imagine the economics and technology spread potential behind this switch from the detection in the instrument to the detection directly on the chip makes it particularly appealing. Yole had anticipated that upcoming sequencing technologies would leverage on-chip detection, because the potential for scalability with semiconductor devices makes it much cheaper as soon as large volumes are reached. But we had thought the on-chip detection schemes would be electrical, like GenapSys’ or Roswell’s. What we had not anticipated was that the optical detection in the instruments would be replaced by CMOS image sensors directly at the consumable level. So, is this a one-shot move or is the trend to be continued? For low-throughput optical sequencers at least, it seems only the beginning. We can imagine the surface of the CMOS sensor will be enlarged in future versions of these consumables, as was the surface of the glass flow cells in other Illumina and BGI sequencers, in order to increase the amount of data generated.

So, plenty of things have happened over the past two years. And this might only be the beginning of important changes in the sequencing landscape. The whole supply chain, from semiconductor players to optics players, might be impacted. We foresee exciting times ahead!

Author

Sébastien Clerc - Yole Développement

Sébastien Clerc is a Technology & Market Analyst in Microfluidics, Sensing & Actuating at Yole Développement (Yole).
As part of the Photonics & Sensing team, Sébastien has authored a collection of market and technology reports dedicated to microfluidics and other micro-devices for both market segments: medical (including diagnostics, pharmaceutical, biotechnology, drug delivery, medical devices) and industrial (including environment, agro-food).
At the same time, he is involved in custom projects such as strategic marketing, technology scouting and technology evaluation to help academic and industrial players in their innovation processes. Thanks to his technology & market expertise, Sébastien has spoken in more than 20 industry conferences worldwide over the last 4 years.
Sébastien Clerc graduated from Grenoble Institute of Technology (Grenoble INP – Grenoble, France) with a Master’s degree in Biomedical Technologies. He then completed his academic studies with a Master’s degree in Innovation and Technology Management in the same institute.

Related reports

Next Generation Sequencing & DNA Synthesis: Technology, Consumables Manufacturing and Market Trends 2019
With the sequencer installed base doubling, the sequencing consumables market will reach $7.8B by 2024

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Cameras for Microscopy and Next-Generation Sequencing 2019
Disposable image sensors: a revolution for microscopy and next-generation sequencing.



Source: http://www.yole.fr/

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