Los Angeles, CA – Oxford Nanopore announced today that it has raised an additional £100M ($126M). The investment round was led by new investor GT Healthcare Capital Partners, a pan-Asian fund with special reach in China, as well as existing investor Woodford Investment Management, among other new and existing investors. This round of funding brings its total investment to £351M, and values the company at £1.25B. Oxford Nanopore intends to use these funds to expand commercial operations worldwide.At the last 2 AGBT conferences, we presented an analysis based on Christensen’s disruptive innovation model suggesting that Oxford Nanopore may soon reach an inflection point (see figure below).

Under Christensen’s model, the demand from 3 customer groups from a performance* perspective (Y-axis) grows relatively slowly and linearly over time (X-axis), as shown by the red lines above.Looking at select NGS platforms (from top to bottom), Illumina’s HiSeq franchise addresses needs from the high-end of the market, most notably customers willing to pay a premium for high quality high throughput data. The MiSeq (and NextSeq [not shown]) franchise addresses demand from the middle of the market. Looking at Ion Torrent, the PGM at launch arguably didn’t meet the low end of the market (below the red line), given its high error rates with homopolymer regions and its low throughput. Improvements in the chemistry, bioinformatics and the launch of a novel platform (Proton) largely addressed these issues.Getting to Oxford Nanopore, the MinION similarly initially didn’t meet the requirement of the market for most applications. This appear to have changed on October 17, 2016 with the release of the 9.4 chemistry that delivers ~10 Gb of throughput with 92% accuracy on 1D read, and 99%+ accuracy in (some) customers’ hands on 2D reads (97% on their website). These remarkable improvements in performance (40x improvement in throughput in the last ~2 years) helped the technology reached an inflection point, and can now satisfy the low end of the market for multiple applications, most notably: infectious disease (especially for pathogen identification in the field), microbiome analysis (given long reads capabilities), de novo assembly & large genome scaffolding, and even clinical applications in the mid-term (with interest from at least one global diagnostic company).Interestingly, while Illumina has sold customers on the undeniable importance of accuracy, other metrics such as read-length and detection of base modification (e.g., methylation) may make Oxford Nanopore (and PacBio) attractive alternatives now that other minimum requirements around throughput, cost per bp and accuracy are met. Scientists are also increasingly appreciating the importance of structural variations that are best studied using long reads.Discussions that we’ve held with key opinion leaders confirm that Oxford Nanopore is finally ready for prime time. As of September 30, 2016, the company had >3,000 units in the field (>2,200 customers). Based on developments in the last 2 months, we expect that this number will increase rapidly in 2017, as the company and technology (PromethION – about a dozen have shipped to date) will both continue to scale.Feel free to contact us at info@decibio.com to request a full copy of AGBT posters.Note: *Performance metric used broadly to include attributes beyond throughput or data quality (e.g., turnaround time, sample-to-answer solutions)Disclaimer: Companies listed above may be DeciBio clients and/or customers---

Author: Stephane Budel, Partner at DeciBio Consulting, LLCConnect with Stephane Budel on Google+ or LinkedInhttps://plus.google.com/+StephaneBudelhttp://www.linkedin.com/in/budel