Happy New Year from BioInformatics LLC! We’ll now continue with our thoughts on competing in the life science tools market in 2012. This year it will be especially important to maintain a product portfolio that offers a broad range of products to appeal to the widest possible range of applications and budgets. Sales of consumables will be particularly important when purchases of capital equipment are likely to be deferred. A robust product portfolio provides resiliency in a challenging funding environment and an advantage over niche suppliers. Illumina recognized this when it entered the real-time PCR market with its Eco platform. With an installed base of almost 1,000 units the company is focusing on building its reagents business with these new customers.
Sigma-Aldrich is also looking at its core life science markets and introducing new consumables for specific applications, including high throughput kits and accessories for nucleic acid purification. The company has expanded its offering of validated antibodies and next-generation products for quantitative PCR and whole genome amplification.
In an example of applying mature technologies to new applications, Life Technologies sees new growth possibilities in their legacy Sanger sequencing portfolio. In the research segment, Sanger sequencing is an increasingly important tool for confirmatory testing of next generation sequencing results. Likewise, Bio-Rad Laboratories has also seen increased sales of its protein expression analysis products as researchers now seek to validate gene expression data generated by NGS. Bio-Rad has refreshed products in its core markets of electrophoresis, blotting and imaging to help keep satisfied customers loyal to their brand.
No discussion of competition in core life science markets would be complete without noting the transformational effects of next generation sequencing (NGS) and the effect it is having not only on the manufacturers of NGS instruments, but on the surrounding ecosystem of companies providing critical sample preparation and analytical products. The NGS segment of the market is experiencing over-capacity at the high end of the market characterized by the major genome centers. This over-capacity has challenged Illumina to carefully recalibrate its strategy. As the ability of sequencers to test more samples and generate more data has advanced, customers are having a difficult time finding samples to “fill up a run”. The effect, at least in the short term, is decreased demand for new sales of HiSeq and slower-than-anticipated upgrades of Genome Analyzers.
To combat this effect Illumina is working with customers to ease the front-end sample preparation burden. The company believes that the bottleneck lies not in the ability to find interesting sequences to interrogate, as “there is an insatiable demand of things to get sequenced” but in the preparation of the samples for sequencing, along with data analysis and interpreting biological meaning from the data1. In addition, it is seeking to transition customers to more easily prepped Whole Genome Sequencing rather than exome sequencing, reducing the sample preparation bottleneck, but also aligning experimental hypotheses with their instruments’ core capabilities. They also note that increasingly lower costs for whole genome sequencing will become comparable to the cost of exome sequencing and attract more customers to the market.
With its acquisition of Ion Torrent in late 2010, Life Technologies has approached the market from the opposite direction. Capitalizing on Applied Biosystems deep penetration of the real-time PCR and Sanger sequencing segments of the market, Life Technologies is experiencing significant success with its desktop Personal Genome Machine priced at $50,000. Over the next two years, BioInformatics LLC’s own research projects a slightly greater rate of adoption of the PGM over Life Technologies’ own SOLiD platforms, not only because of its lower price tag, but also because of its level of innovation in sequencing technology, ease of use and turn around time.
The high level of investment around NGS has similarly affected the microarray segment of the market, particularly Illumina and Affymetrix. Because Illumina is firmly entrenched in both NGS and microarray markets, the cannibalization of the array market by NGS is less problematic than it is for Affymetrix. While Illumina is seeking to take advantage of the synergies between the two technologies by introducing the exome version of several of its microarrays with the goal of making it more cost effective for customers, Affymetrix admits it must more persausively communicate why arrays are a useful companion to NGS. Affymetrix points to the fact that the vast majority of publicly available sequence information resides on its arrays, positioning the company to fully exploit the genotyping market as novel sequence variances are identified by NGS.
In the gene expression market, Affymetrix has launched a number of new products such as its GeneChip miRNA 2.0 Array to capitalize on an increased interest in microRNA as gene regulatory elements. Affymetrix also launched a product called the Human Transcriptome Array, which it believes to be superior to mRNA sequencing in gene expression profiling studies.
Other new technologies seek to capitalize on the anticipated demand for NGS technology as the number of genomics researchers employing it is projected to increase by 22% worldwide between 2011 and 20133. Increased investment in digital PCR, gene selection technologies and outsourced gene sequencing services should all be noted. Indeed, Bio-Rad recently acquired the digital PCR startup QuantaLife, a deal which the company estimates could grow to be a several hundred million dollar market and is a natural extension of Bio-Rad’s “top of mind” presence in the PCR market, due in large part to the attention associated with its famous PCR videos.
Next up, we’ll discuss opportunities to migrate toward the clinical market.