MarketWatch: Sequencing Companies Dominate Investment

$400 the approximate cost of genetic testing to predict a patient’s response to the commonly prescribed blood thinner warfarin.

MIT Technology Review, March/April 2010, by Lauren Gravitz – The market for personalized medicine is growing: according to PricewaterhouseCoopers, the core market will reach $42 billion by 2015. However, that growth is not uniform. Some areas, such as genomic sequencing, are surging ahead; others, such as translating genetic data into clinically useful information, languish.

In this environment, startups developing sequencing technologies, such as Pacific Biosciences, Illumina, and Complete Genomics, have attracted sustained investor interest as they race to create ever cheaper ways to decode DNA (see “Faster Tools to Scrutinize the Genome“). In their most recent rounds of venture funding last summer, Pacific Biosciences and Complete Genomics received $68 million and $45 million, respectively.

Diagnostic technologies, too, are moving at a rapid pace. Startups from Boston to Silicon Valley have been pinning down disease-related genetic markers and creating many new tests that are already in the clinic or on their way. As these companies grow and bring more tests to market, large diagnostics companies are likely to acquire them, says venture capitalist Brook Byers of Kleiner Perkins Caufield and Byers.

One of the biggest undeveloped areas in personalized medicine, however, is the information technology needed to analyze and store the huge quantity of genetic data that is starting to pour forth (see “Drowning in Data“). Of the few bioinformatics companies working to digest the data, Proventys, based in Newton, MA, is among the furthest along. Its technology combines biomarkers and other information to make risk predictions about diseases.

Meanwhile, pharmaceutical companies are responding to the nascent market for personalized therapeutics in different ways. Pfizer, for example, is collaborating with existing biotech companies to develop drugs and diagnostics based on genetic testing. AstraZeneca recently announced a partnership with the Danish diagnostics company Dako, the first of many alliances it plans in a strategy for bringing genetic tests to market. Novartis is taking a different tack, dedicating a large portion of its own resources to developing personalized medicine.

In the United States, benefit management companies, which act as middlemen between patients and insurers or employers, are aggressively moving into the market. One of the largest, Medco, has established a personalized-medicine group to recommend which genetic tests insurers should pay for. In February it acquired DNA Direct, a firm that specializes in analyzing genetic diagnostics, to aid in this effort. One of its largest competitors, CVS Caremark, increased its stake in a similar company, Generation Health, last December. Because such companies serve millions of people, they will play a critical role in making genetic tests broadly available and educating doctors about the benefits of offering such tests to their patients.

A machine for DNA sequencing was invented by Leroy Hood and his colleagues at Caltech. In 1992, Hood and several others were granted U.S. patent 5,171,534 for an “Automated DNA Sequencing Technique.” Replacing slow and expensive manual methods, this is one of the most important pieces of intellectual property in biotechnology; explore this interactive analysis by IPVision of the patent’s impact on the innovation landscape.http://www.technologyreview.com/biomedicine/24593/page2/

Cheap DNA sequencing will drive a revolution in health care

The dream of personalized medicine was one of the driving forces behind the 13-year, $3 billion Human Genome Project. Researchers hoped that once the genetic blueprint was revealed, they could create DNA tests to gauge individuals' risk for conditions like diabetes and cancer, allowing for targeted screening or preëmptive intervention. Genetic information would help doctors select the right drugs to treat disease in a given patient. Such advances would dramatically improve medicine and simultaneously lower costs by eliminating pointless treatments and reducing adverse drug reactions.

Delivering on these promises has been an uphill struggle. Some diseases, like Huntington's, are caused by mutations in a single gene. But for the most part, when our risk of developing a given condition depends on multiple genes, identifying them is difficult. Even when the genes linked to a condition are identified, using that knowledge to select treatments has proved tough (see "Drowning in Data"). We now have the 1.0 version of personalized medicine, in which relatively simple genetic tests can provide information on whether one patient will benefit from a certain cancer drug or how big a dose of blood thinner another should receive. But there are signs that personalized medicine will soon get more sophisticated. Ever cheaper genetic sequencing means that researchers are getting more and more genomic information, from which they can tease out subtle genetic variations that explain why two otherwise similar people can have very different medical destinies. Within the next few years, it will become cheaper to have your genome sequenced than to get an MRI (see "A Moore's Law for Genetics"). Figuring out how to use that information to improve your medical care is personalized medicine's next great challenge.

First Illumina HiSeq Machines Advertised

News: the Illumina HiSeq can produce 200 gigabases (Gb) of sequence data and 2 billion reads per run. When it was launched we knew that BGI in China had signed an agreement to buy 128 of these machines but no-one has fessed up to owning one just yet.

Things might have changed today.

Two updates to the map of high-throughput sequencers, one hot on the heels of the other are both advertising HiSeq capability in Europe. GATC and DNAvision, both service companies have updated the map to say they have a HiSeq machine ready and waiting to service customers. Their corporate websites are a bit less clear on whether it has actually arrived yet, indicating probably that the HiSeq has just been ordered.

Toward reading your own personal 'Book of Life'

What secrets about your risk for diseases are written in your own personal "Book of Life" - the 30,000 or so genes that make you you?

Advances in DNA-sequencing technology are bringing closer the day when it will be more economical for consumers to get an answer to that question, and others, by ordering up the deciphering of their entire genetic endowment - their "personal genome." With their Book of Life in hand, consumers and their physicians could map out strategies for the prevention, early diagnosis, and more effective treatment of diseases ranging from cancer to rare-genetic disorders.

C&EN Senior Editor Celia Henry Arnaud notes that the first human genome sequence cost more than $2 billion and took about a decade to complete. Technological advances now have cut the time to as little as one week, and some companies are charging individuals $48,000 for the service, a cost that experts expect to drop sharply in the coming years, the article notes.

But the technology also raises important ethical and legal issues, including the possibility of discrimination on the basis of genetic information in the areas of employment and insurance coverage. Many believe that personal genomes are inevitable. "In the future, sequencing will be so cheap and so easy to access that everybody could get sequenced if they want. It'll be iPod pricing," says the CEO of a company that specializes in direct-to-consumer genome sequencing.

Complete Genomics and ISB Team Up for Huge Whole Genome Study

The era of genetic studies based on whole genome sequencing is definitely upon us. According to a recent press release, Complete Genomics will provide the Institute for Systems Biology with 100 (nearly) whole genome sequences to researchHuntington’s disease – a degenerative brain condition which affects nearly 1 in 10,000 people in the US.

This will be the largest genetic association study of its kind ever. While the genetic causes for Huntington’s are well understood, the study will focus on the unknown “disease modifiers” – genes that cause the variation in severity in patients. If successful, the ISB study will also boost Complete Genomics’ reputation for sequencing.There are many ways to associate genes with diseases.

Companies like 23andMe regularly use SNPs (single nucleotide polymorphisms) to identify individuals with high risks for certain conditions. The ISB study, however, will examine nearly all of the genome – looking at SNPs, and sequences of DNA that cannot be analyzed with today’s SNP technology. As whole genome sequencing becomes cheaper (CG is at $20k and dropping) more and more research institutes will be able to follow in ISB’s footsteps and find important discoveries in the less well known stretches of your DNA.

That’s going to lead to a better understanding of the associations between illness and genetics and ultimately provide you with improved healthcare.Of course, the study isn’t remarkable simply for using whole genome sequences, it’s the number of those genomes that’s impressive. 100 genomes (probably around $20k each) is a substantial research investment. ISB is taking advantage of the patient pool size by looking at volunteers with severe forms of Huntington’s, members that exhibit a family history of the disease, unaffected family members, and control groups.

This is the first large sequence study that CG will attempt with their newly expanded facilities. It also puts them squarely on the path to achieving their goal of sequencing 10,000 genomes by the end of 2010. By expanding the range of DNA analysis to outside the standard set of SNPs, CG and other whole genome sequence companies are allowing geneticists to really examine the exome (protein coding sections) and regulatory portions of DNA. As CG, Illumina, and others make whole genome sequencing more affordable, these associated scientific advantages will become even more desirable. That’s going to mean big business growth in the next few years. Hopefully it will also mean big successes in medicine as well.

November 5th, 2009 by Aaron Saenz

Get Your Entire Genome From Complete Genomics For $5000

It’s getting progressively cheaper to sequence your entire genome. Earlier in June, Illuminaannounced it would provide sequencing for close to $50k, half of their original price. Not to be outdone, Complete Genomics just released on Monday that it had gathered $45 million dollars in funding. The Silicon Valley based company is planning to use that money to further develop their streamline sequencing operations so that they can offer a complete genome for just $5000 by next year. CG’s goal is to finish 10,000 sequences by years end 2010. Even though that’s later than we had hoped, it’s still a whole lot of DNA and at the cheapest price for a whole genome seen so far. The question is, can they really pull it off?

We’ve been looking for a company, any company really, to break the $1000 price mark for a complete genome sequencing sometime in the next few years. That’s about the point where retail sales of the service will explode. With their exponentially decreasing price tag, Complete Genomics might be on that path. However, we know of at least one company that is trying to reach that goal by the end of this year. Stay tuned for that story in the next few weeks.

If you’ve never heard of Complete Genomics, read our first and second story to catch up. Basically they use a common form of short read sequencing and throw in a ton of computer power to sequence a human genome. Interest in personal genomics is escalating as genetic links to diseases are discovered. 23andMe already offers some testing for such diseases and is hoping to gather samples for further clinical trials. By providing the entire genome for perusal on the cheap, CG could make it economically feasible to expand that research into many more illnesses. Already, we’ve shown you how some facilities are erroneously promising to predict a child’s aptitudebased on genetic sampling. Perhaps with the cheap sequencing CG could provide, scientific research will match pace with the growing demand for such testing.

Daniel MacArthur of Genetic Future was able to pry CG head Cliff Reid to provide some details in how they hope to achieve their goals. First, Reid disclosed that the test won’t be offered directly to consumers, but rather through retail providers such as Knome and 23andMe. That means the price you or I will see could be considerably higher than $5k. Whatever the retail price, Reid promises 120 billion base pairs sequenced, 98% of the genome, with just one error in 10,000. That’s considerably better stats than what CG offered in February (92% of genome, about one error in 1,000).

Between now and year’s end 2009, Complete Genomics will focus on its dozens of customers currently in the line up. These include the Broad Institute out of MIT and Harvard which announced it was purchasing at least 5 genomes from CG in March. The Broad Institute reportedly paid $20k for each of their genomes which might be taken as the current baseline price for CG customers. If so, that’s a factor of four that the company has to make up between now and next year.

But scaling is no problem for genome sequencing. Remember that it took 15 years to sequence the first human genome, but the next 6 were done in 24 months. Now we’re talking about doing thousands a year. That’s just nuts and one of the amazing parts about sequencing that I love. Exponential growth is sexy science. And it’s supposed to be one of CG’s strengths. They just finished their first genome in the summer of 2008, and are now on schedule to finish 100 by the end of 2009. Current estimates of finishing 1000 by mid 2010, and 9000 more by the end of that year fit within the exponential growth curve. As MacArthur points out, most of these sequencing services will likely be purchased by researchers in genomic and cancer studies. So the demand is also there.

How can CG scale so quickly? By remaining inflexible but efficient. Their process doesn’t rely on making huge improvements in sequencing technology. Or finding a new sequencing technique. It comes down to streamlining the process. Stick to one task, human genome sequencing, miniaturize whenever possible, fewer reagents means lower costs, and build build build. You can bet a huge portion of that $45 million is going to expanding their facilities in Mountain View.

Who provides the cheap genomes is probably less important than the change it will create. While scientific research will undoubtedly benefit first, the public at large will likely become a dominant consumer. Genetic information is on the journey to becoming one of the most important sets of data someone can know about themselves, with insights into disease, aptitudes, and longevity. Give us the chance for cheap access to that info and you’ll never run out of customers. Just a little while longer, it’s bound to happen.

The Next Big Thing Is Not Right in Front of You

Investing in technology-driven fields is risky, especially when everyone touts them as the Next Big Thing. Sure, it's easy to see quick gains, but you're just as likely to see those gains vanish as the next-generation technology sneaks in and replaces it -- the disruptor becomes the disrupted, so to speak.Perhaps the fastest evolving technology right now isn't computer tech, but rather is found in DNA sequencing. We've gone from sequencing the first genome for about $2.7 billion in the Human Genome Project just a few years ago and rather quickly come down to $50,000 apiece. Next stop: the $1,000 genome.This week an article in Nature Biotechnology documented the use of aHelicos BioSciences' system to sequence the genome of one of its scientific founders at a cost of under $50,000 -- excluding the cost of the $1 million machine, of course. In June, rival Illumina (Nasdaq: ILMN) announced that it was launching a service to sequence genomes of rich people -- let's face it, they're the only ones who can afford it at

this point -- for about the same cost, so the price isn't what's exciting.

What should have makers of second-generation sequencers -- Illumina, Roche and Life Technologies (Nasdaq: LIFE) -- a little worried is that Helicos' system allows for sequencing of a single DNA molecule. Removing the amplification step to generate many copies of the DNA molecule should speed up the process and theoretically make it less costly.Don't go running out to buy shares in Helicos just yet, though. There's a reason the company trades at a market cap well below $100 million. Two private companies, Oxford Nanopore and Pacific BioSciences, are developing machines that can sequence much longer single molecules, which should speed up sequencing and bring down the cost. Being private companies without disclosure issues, the businesses can operate somewhat in stealth mode, which makes it hard for investors to determine exactly who will win this battle. To keep from getting disrupted, Illumina has partnered with Oxford Nanopore to market its next-next-generation sequencer once it's available for commercial use, so it may be positioned well if Oxford Nanopore's technology turns out to work well.Is it nothing more than a head fake?

So calling the above the Next Big Thing is a bit of a mistake, mostly because we, as outside investors, don't have any real way to benefit (except, possibly, with Illumina). Rather than trying to figure out which company's technology will eventually prevail, investors might be better off looking at companies working on making the overload of information from sequencing thousands of genes more useful for patients: deCODE Genetics, Knome, Navigenics, and 23andMe.Unfortunately, they're all private companies, with the exception of deCODE Genetics. And that one is a penny stock selling off assets to stay alive. You can get a piece of 23andMe by buying shares in one of

its investors, Google (Nasdaq: GOOG), although that's a fairly convoluted way to get in on the action. Keep

them in mind for the future, though, if they ever go public. Presenting DNA sequence data in an understandable fashion is something customers are going to be willing to pay for. Fool co-founders Tom and David

Gardner used 23andMe's service, which eventually led David to recommend Illumina to Stock Advisor newsletter subscribers.The real beneficiaries of the Next Big Thing

So if the winner of the sequencer war is still up in the air (or they're all doomed to a low-margin death) and genome-information companies are all private, how can investors profit from this Next Big Thing? I think the real winners from low-priced sequencing will be drug developers.Consider: Much of the low-hanging fruit for treating diseases has already been picked. To take drug-development to the next level, drugmakers need to know how genetic differences in patients affect the usefulness of their drugs. For instance, mutations in a gene called K-ras affect whether Amgen's (Nasdaq:AMGN) Vectibix or Bristol-Myers Squibb's (NYSE: BMY) and Eli Lilly's (NYSE: LLY) Erbitux helps cancer patients or not. Knowing that ahead of time? Priceless, both to the patient and the company.By avoiding patients a drug can't help, drugs will become more efficient, on average, which should make everyone happy. However, a widespread personalized approach to medicine will only be possible when DNA sequencing become cheap enough. We seem to be on the road, but it will still take a while to develop drugs to take advantage of this new knowledge. So this is a long-term play for sure.The genome craze in the early part of this decade didn't live up to its hype -- just take a look at a 10-year chart ofHuman Genome Sciences (Nasdaq: HGSI) to see what I mean.I truly think it's different this time. But figuring out the best place to put your dollars to work requires more than jumping in on the obvious.

NHS not ready to take advantage of breakthroughs in genetic sequencing

The health service is not ready for an impending genetic revolution in medicine and requires urgent reform to turn scientific advances into better patient care, a parliamentary inquiry declares today.

The NHS needs to revamp its provisions for genetic testing, the training of doctors and nurses, and its IT and laboratory services, if understanding of the human genome is to deliver health benefits to its patients, according to a House of Lords report.

Medical advances stemming from the sequencing of the human genetic code are already starting to improve healthcare, and could transform it over the next decade, the influential Lords Science and Technology Committee said. Widespread genetic testing could aid the diagnosis and prevention of disease, and allow doctors to prescribe targeted drugs according to patients’ individual genetic profiles.

This opportunity, however, could easily be missed without significant changes to NHS infrastructure, training and practice, the committee found. It called on ministers to prepare a new White Paper on genomic medicine, to address the challenges ahead. “The use of many types of genomic tests is increasing rapidly, both in the NHS and in tests sold directly to consumers, and the availability of these tests will, in time, have a dramatic impact on disease diagnosis and management,” the report said. “This is already placing strain on the expertise of doctors, nurses and healthcare scientists, who at present are poorly equipped to use genomic tests effectively and to interpret them accurately, indicating the urgent need for much wider education of healthcare professionals and the public in ‘genomic medicine’.

ILMN -Biotech firm Illumina will sequence your entire genetic code -- and throw in a Mac - for $48,000.- Sourced WhisperFromWallStreet.com

Illumina Inc.ILMN Price competition is coming to the rarified world of genome sequencing.
For $48,000, San Diego-based Illumina (ILMN) will sequence your genome -- in other words, your entire genetic code. Until now, the only other company offering personal genome sequencing services is biotech startup Knome. It charges $99,500.

Genome sequencing can alert individuals if they have inherited genes that cause illnesses like diabetes, Alzheimer's or cancer. Using the information as a guide, people could alter their lifestyles in an attempt to dodge potentially latent diseases. They also could find out the probability of passing along a genetic disease like cystic fibrosis to their children, or uncover interesting details about their ancestry.

Illumina is tossing in an iMac computer loaded with a customer's genetic data to round out the deal. But spending nearly $50K on a genetic code will not fit most people's budgets, even though that pricetag is hundreds of millions of dollars cheaper than sequencing the first human genome in 2003. Illumina says it expects just tens, perhaps hundreds, of people to sign up for the service within the next year.

About
Illumina, Inc. engages in the development, manufacture, and marketing of integrated systems for the analysis of genetic variation and biological function. Its instrumentation products include Genome Analyzer II, an instrument for high-throughput sequencing using Illumina sequencing by synthesis technology; iScan System, a high-resolution imaging instrument to scan BeadArray based assays; and BeadXpress Reader, a low- to mid-multiplex, high-throughput instrument for readout of assays. The company?s consumables comprise Standard Sequencing Kit, a reagent used for sequencing by synthesis chemistry on the Genome Analyzer; Paired-End Genomic DNA Sample Prep Kit, a streamlined library preparation kit to generate 200?500 kb insert paired-end reads; InfiniumHD Whole-Genome BeadChips comprising Human1M-Duo, Human610-Quad, Human660W-Quad, and HumanCytoSNP-12, which are multi-sample DNA analysis microarrays that interrogate up to 1.2 million markers per sample; iSelect Custom Genotyping BeadChips that are customer designable SNP genotyping arrays for 6,000 to 200,000 markers; and Whole-Genome Gene Expression BeadChips, which are multi-sample expression profiling arrays with up-to-date content for human, mouse, and rat. Illumina was founded in 1998 and is headquartered in San Diego, California.

Knome offers sequencing of all of your protein-coding genes for $24,500

Personal genomics is a rapidly evolving game, with a clear end goal in sight: offering consumers an accurate, affordable and complete genome sequence, and providing them with tools to dig out the useful nuggets of information contained therein. That goal remains out of reach, and while DNA sequencing technology continues to mature companies in the personal genomics space are offering products at various points on the trade-off curve between information content and cost.

At the low-information/low-cost end, companies such as 23andMe and deCODEme offer cheap (sub-$1000) genome scans looking at between 500,000 and a million sites of common variation throughout the genome. These provide insight into a small fraction of your genome, but include the variants we know the most about (due to the recent explosion of genome-wide association studies, which look for common genetic variants associated with complex disease risk).

Meanwhile, at the other end of the spectrum we have the boutique service offered byKnome - sequencing of the entire human genome, or at least the 85-90% of it that can be reached with current short-read technologies, for the princely sum of close to $100,000. It's difficult to justify this cost given the interpretable information currently obtainable from a genome sequence, but a full genome sequence does offer the possibility of getting insight into rare, severe disease-causing variants lurking in your genome that are largely invisible to genome scans.

Now Knome has launched a new product that provides a substantial chunk of the information value of a whole genome sequence at a quarter of the cost, by focusing exclusively on the 2-3% of the genome that codes for proteins: unlike low-priced SNP-based genotyping, which captures genetic changes known as common variants by taking a sample of less than 0.05% of the genome, comprehensive gene sequencing captures the entire coding region of an individual's genes, collectively known as the exome, enabling the detection of rare variants - mutations that many scientists believe account for the majority of the genetic burden of disease.

That last claim is pretty optimistic - it's now clear from genome-wide association studies that the majority of the common variants associated with common diseases are actually found outside protein-coding regions. However, it's also true that more rare, severe disease-causing mutations do tend to cluster within and around protein-coding regions. 

Perhaps more importantly, there is a sound pragmatic reason for focusing on this fraction of the genome: it's simply much easier to interpret a mutation in a protein-coding region than outside it. Right now, our dismal ability to predict the functional impact of variants in non-coding regions means that sequencing the majority of the genome falling outside protein-coding genes actually adds very little in terms of health prediction. For the moment, combining a cheap genome scan (to pick up genome-wide patterns of common variation) with exome sequencing (to detect any rare, clearly pathogenic mutations) would give you pretty much everything you'd be likely to get from a whole genome sequence.

Knome plans to offer the service for $24,500 for individuals, or $19,500 per person for couples and families. That's still well and truly in the boutique price range - but you should see this as yet another waypoint on the road towards affordable, complete genome sequencing.