The 2nd Edition of our NGS report offers a number of key updatesDeciBio announces the publication of its 2nd edition Next Generation Sequencing (NGS) market research report. In this 2nd edition, we detail the market size, segmentation, growth and trends of the NGS industry from 2009 to 2015. The 2nd edition contains the following updates:2012 actual financials incorporated: Company revenue / growth forecasts have been updated to include actual reported 2012 financials for major public market players (e.g., Illumina, Life Technologies, Roche, Pacific Biosciences, Complete Genomics / BGI)Market forecast to 2015: For each of the 20 segments assessed in this report, we provide growth estimates through 2015. The market is segmented by:Profiles of emerging companies: This 2nd edition cites and provides a short introduction and profiles of ~30 emerging companies (e.g., NABSys, Oxford Nanopore Technologies) that innovate in specific NGS niches market (e.g., clinical services, bioinformatics)

• 3 product types: instruments, reagents and services
• 2 instrument types: workhorse and desktop instrument
• 5 companies: Illumina, Life Technologies, Roche, Pacific Biosciences and other companies (e.g., Complete Genomics, Oxford Nanopore)
• 5 customer types: Academia, Biopharma, applied markets, clinical customers and Others5 geographies: U.S., Europe, Japan, Asia / Pacific, and Rest of the World
• Extended content: The new edition contains more than 60 additional pages of content, including additional color and granularity to help understand key products in each category
• Additional expert feedback: This report includes feedback from 16 additional experts, including quotes from conversations we’ve had with them in the last 4 months

More company specific insight: Assessment of Illumina’s excellent execution, Moleculo acquisition, and strong adoption of MiSeq, Ion Torrent’s 2012 launch of PGM and growth of the desktop market, Roche / 454 and PacBio’s significant headwinds and how each is dealing with their current situation and a revised assessment of the promise of emerging players like Oxford Nanopore.Clinical market overview and projections: Assessment of the burgeoning clinical sequencing market in a special section including major testing categories and projected growth over time.

A brief summary of our findings are summarized below.

The $1.2B NGS manufacturer market is expected to grow ~20% p.a. to $2.1B in 2015F. We expect market growth to continue to be largely driven by desktop sequencers.Over the next 2-3 years, sequencing is expected to remain a duopoly: With Roche struggling and Pac Bio falling short of (previously high analyst) expectations, Illumina and Life Technologies are expected to dominate the NGS market over the next 2-3 years. We expect Illumina and Life Technologies will have a combined 85% market share by 2015, despite the potential entry of competitors (like Oxford Nanopore) with differentiated technologies.The market has largely lost its appetite for expensive instruments: The introduction of the PGM, Ion Proton and MiSeq – as well as the ability of these platforms to scale – has been widely successful in large part to the low price point of these platforms. Emerging platforms are low-cost (e.g., GridION), most likely marking the end of growth for expensive instruments.Desktop platforms are expected to continue to transform the NGS market resulting in a majority market share by 2015: With instrument prices of $70K-240K (including ancillary instruments); desktop instruments have transformed the NGS landscape. New versions of these platforms have created a new mid-throughput (1-100 Gb) segment, enabling a broad range of key applications (e.g., WES, whole transcriptome analysis) and broadening the market to new customers, such as individual labs, niche service providers or clinical labs as well as more price-sensitive geographies. Illumina has seen fast adoption of its MiSeq platform, and its installed base is catching up with Ion Torrent platforms quickly. However, Ion Proton is expected to see strong interest in its Ion Proton P II chip, as we expect the chip to offer a throughput in the 50 Gb range. As a result, we forecast that these two players will tie for leadership position in the desktop NGS market 2015, with Roche and emerging players (e.g., Oxford Nanopore, Nabsys) splitting the rest of the market.NGS manufacturer market growth has encouraged growth in ancillary upstream and downstream technologies: cumbersome workflow / sample preparation (upstream) and complicated data analysis (downstream) remain key customer unmet needs. As a result, a number of companies (e.g., Agilent, Fluidigm) have developed tools that facilitate workflow / sample preparation (upstream). Similarly, the lack of user friendly tools to decipher the large amount of data generated by NGS has presented an opportunity to software developers. A number of independent bioinformatics companies have started to offer software and services in the last few years (e.g., Accelrys). In addition, sequencing companies have started to tackle this issue by offering a number of bioinformatics solutions (e.g., Life Technologies’ commercial cloud-based software Ion Reporter, Illumina’s BaseSpace Apps). These adjacent markets represent an opportunity for non-NGS manufacturers to participate in this high growth market.NGS manufacturers continue to heavily invest in clinical applications for NGS. Currently, clinical customers represent less than 10% of the manufacturer market. However, we forecast their share might grow to more than 25% in 2015, resulting in manufacturer sales to clinical customers of $500M+. Over the next few years, we expect clinical customer market to focus primarily on non-invasive prenatal testing (NIPT) and oncology with other applications in infectious diseases, HLA typing, and idiopathic diseases. While the majority of spend is expected to focus on targeted sequencing – especially panels in the short term – the market is expected to move to exon sequencing and ultimately to whole genome sequencing (currently performed on a test-by-test basis). Tests are expected to be offered by a mix of institutions, including sequencing players (e.g., Illumina), commercial MDx companies (e.g., (e.g., GeneDx, Correlagen, Ambry Genetics) and academic institutions (e.g., The Broad Institute). Sequencing companies seem to take an “enabling” approach, by allowing institutions to develop their own test. Illumina has also made clear moves indicating its intent to sell NGS tests in its own lab (Verinata acquisition).

Authors: Stephane Budel, Partner at DeciBio, LLCConnect with Stephane Budel on Google+https://plus.google.com/+StephaneBudel