With the JP Morgan update season about to get in full swing, I thought it might be a good time to review the sequencing field and where we stand at the beginning of 2023. The big news was, of course, that after years of having a virtual monopoly, Illumina faces a bevy of new competitors.
Illumina - Still the King
Sensing that the good times were ending, Illumina finally updated their flagship NovaSeq to the NovaSeq X, a beast that can sequence 20,000 genomes a year at $200 each. It is powered by the long promised XLeap-SBS chemistry (formerly known as Chemistry X). A side benefit (that I thought of as relatively minor but nearly stole the show at the reveal) is that it comes with a 90% reduction in packaging and 50% reduction in plastic. High volume customers seemed really happy about that. It’s certainly welcome news, but it gives me the nagging feeling that Illumina is now wringing the last bit of advancements out of a venerable technology. And while it was very good news that XLeap-SBS would be backwards compatible with the NextSeq 1000/2000, that won’t be happening until 2024. That opens up a pretty big window for the competition. Speaking of which…
Ultima Genomics - Go Big or Go Home
Ultima Genomics came roaring out of stealth mode in 2022 with their preprints and announcements about the UG 100 at AGBT. Everything about the news was big. A big round of funding, to the tune of $600M. A big price drop to what would be a market leading $1/Gb. Big throughput with 6Tb per <24hr run. A BIG machine to do the sequencing. Apparently a separate big machine to prep the samples. A big price tag, unannounced but rumored to be in the $1.5-2M range. Oh, and a potential big headache of homopolymer issues. Two big questions. First, are there enough customers at the high end to keep this part of the market growing? Second, is this price delta big enough to get customers to buy the UG 100 over the NovaSeq X, especially given the data quality concerns?
Element Biosciences - Benchtop sequencer with NovaSeq sample prices
With the launch of their AVITI system, Element is approaching the market with an attractive strategy. The AVITI is a desktop instrument (with a corresponding cost of as little as $249k) which has a running cost of only $6/Gb. It would take Illumina’s $1M NovaSeq 6000 to get the data cost down so low. Element is also claiming superior data quality, but it’s unclear how motivating that will be for researchers, especially with higher quality available from PacBio (see below). Finally, CEO Molly He has dropped strong hints that this is only the beginning for Element and it won’t be long before they launch improvements. Perhaps we’ll see something at JPM?
Singular Genomics - Flexibility is Key
Singular Genomics also launched a desktop sequencer, the G4. But rather than competing on price like Element is doing, they’re shooting for flexibility. Each run consists of four flow cells and each flow cell has four independent lanes, allowing for 16 samples per run with no indexing. And while the flow cells can’t be stopped and started independently, it’s a fast system with full runs taking just 19 hours. 16 lanes and quick turnarounds mean quite a bit of flexibility, something that might be especially useful for a core lab with a diverse set of clients. But how many customers will value this flexibility enough to switch from Illumina or forgo lower prices or higher throughput from other entrants? Are they the Goldilocks or the middle child?
MGI - Illumina, but cheaper
MGI is the most similar to Illumina in that they have a broad product portfolio, ranging from the diminutive DNBEQ E (similar to Illumina’s iSeq 100) to the DNBSEQ T7 (similar to Illumina’s NovaSeq), and even the ultra high throughput DNBSEQ Tx, a sort of “deconstructed sequencer” that pays homage to its Complete Genomics roots and claims of a $100 genome. MGI didn’t really launch a “game changer” in 2022, but they finally appear to have “freedom to operate” (FTO) in the US. So, unlike the new entrants in the market who are trying to pick off certain niches, MGI will have the ammunition to attack Illumina across the board. There are two big questions they must face. First, to what extent are US customers willing to buy technology from a company with apparent ties to the Chinese Communist Party and, by extension, the Chinese military? Second, while MGI isn’t a new company, this will be the first time they’ve had to support a truly global deployment of their instruments. Is their support team capable of keeping up with Illumina’s well established support structure?
PacBio - Highest Quality, Long and Short
PacBio made two big announcements in 2022. The first was the Revio, an upgrade to the Sequel II that adds enough firepower to generate 1800 long read genomes per year at $1000 a pop. While this news was greeted with enthusiasm, it’s unclear if this is enough to deliver the long-promised takeover by long reads. Long reads currently only account for about 6% of the market. Are the reads cheap enough and is the throughput high enough as Illumina maintains a 5X and 10X delta, respectively? My estimate is for long reads to grow to no more than 25% over the next few years, meaning short reads are here to stay.
That brings us to PacBio’s second big announcement - an update on their short read platform from their Omniome acquisition, now named Onso. Unfortunately they didn’t divulge enough information about pricing to make any strong predictions about the likely success of the platform. It’s a reasonably priced desktop machine at $259k, but no info on the cost per Gb. They may still be trying to figure out how much of a premium people will be willing to pay for what promises to be best in class data quality.
Oxford Nanopore - Ready to Break Out
Of all the sequencing companies, Oxford Nanopore is always the hardest to pin down as their product portfolio has a lot of moving parts with various combinations of sequencing platforms, flow cells, nanopores, and chemistry (innie and outie?). But what’s clear is that they continue to make steady improvements, especially in terms of what has been their Achilles’ heel, data quality. Their latest setup appears to achieve Q30 raw reads with even higher consensus quality. And with the ability to directly detect methylation (no cumbersome bisulfite conversion necessary) and newly launched support for short reads, it sounds like it might be a good match for the cancer liquid biopsy market. But for now they’re still only around 3% market share. Are they still suffering from a reputation of poor quality (something PacBio suffered from for years when consensus accuracy was actually the highest)? Will 2023 be the year they make big strides in terms of market share?
Will 2023 be the year we go back to dogfight years of HiSeq vs SOLiD, MiSeq vs PGM, and Illumina vs Complete Genomics? Given the bevy of substantial announcements from all comers in 2022, this coming year will likely mostly be about execution. Illumina and Ultima will concentrate on getting their high throughput monsters on the market. MGI might have something new, but they’ll likely have their hands full with the global rollout of their current lineup. PacBio has two new platforms to focus on, so probably just progress updates from them. Singular will try to get over their “supply chain” issues to get the G4 in more labs. They have also stated that the PX, their all-in-one spatial and single cell sequencer, will be launched in 2023. Let’s see if they can stick to that schedule. Element has hinted at big improvements, so maybe we’ll see something substantial from them. Oxford Nanopore announces so many things so often (some of which even get launched) that it’s practically a guarantee we’ll hear something new from them.
And what about the perennial “where are they now?” companies? All GenapSys seemed to accomplish in 2022 was bankruptcy. Another year of crickets from Genia. Roswell stopped focusing on sequencing back in 2021 and went through a significant downsizing in 2022. Is Quantapore still around? Is this the year we see something from Apton?