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Next-Generation Sequencing Generates Momentum:Markets Respond to Technology and Innovation Advances

Ken Rubenstein, PhDThis report focuses on current and innovative next-generation sequencing (NGS) technologies, services, and markets to answer such questions as:

• Which early NGS market entrants have been continually improving and updating their original systems?

• Who has introduced new scaled-down instruments to broaden the market?

• What Generation 2.5 systems featuring new detection technologies and single-molecule sequencing are now on the market?

• When will third-generation instruments led by nanopore technologies be entering the commercial feasibility stage?

• Why is upstream sample handling undergoing continual technological innovation?

• Which informatics providers are moving rapidly toward fully integrated systems to provide the rapid generation of actionable biological information?

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Next-Generation Sequencing Generates Momentum: Markets Respond to Technology and Innovation Advances describes these innovations and analyzes their impact on this extremely dynamic technology and market sector. We report on the:

• NGS systems on the market and those on the horizon

• Possible game-changing innovations still in development

• NGS market dynamics for instruments and services

• Results of an Insight Pharma Reports user market survey

• Interviews with six experts on diverse aspects of NGS

• Analysis of how the field will likely develop over the next several years.

Next-Generation Sequencing Generates Momentum: Markets Respond to Technology and Innovation Advances updates product offerings from Roche/454, Illumina, Life Technologies (Ion Torrent), Complete Genomics (CGI), Helicos, Pacific Biosciences (PacBio). The upstream sample preparation and downstream informatics aspects of NGS have developed into substantial and fast-growing markets of their own. Companies in the informatics space covered in this report include Geospiza, Accelrys, GenoLogics, CLC bio, GenomeQuest, Partek, DNAStar, and Ingenuity Systems.

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Next-Generation Sequencing Generates Momentum: Markets Respond to Technology and Innovation Advances looks at a number of new product and technology candidates in varying stages of development. As the report highlights, some candidates are mainly extensions of current technologies, while others represent something very different.

Large companies have entered the new technology race such as General Electric, IBM, as well as Life Technologies with its Starlight system. Many small entrepreneurial companies are also covered in this report, including GnuBio with its microreactors; Halcyon Molecular and ZS Genetics’ use of scanning transmission electron microscopy; Intelligent Bio-Systems’ 40 million five-micron wells; NABsys, using a hybridization-assisted nanopore method; NobleGen’s approach involving preliminary replacement of each base by longer oligonucleotides prior to sequencing; and LightSpeed Genomics, where patents suggest a novel optical scanning methodology.

Next-Generation Sequencing Generates Momentum: Markets Respond to Technology and Innovation Advances investigates the market dynamics where Illumina, Life Technologies, and Roche currently dominate a sequencer market now estimated to exceed $1 billion per year. It is a market where companies are making continual advances in cost and performance at a pace exceeding that associated with semiconductor technology, and where market adoption, application diversity, and implications for life science research continue to advance.

This report answers such questions as:• Why is Illumina the clear market leader, accounting for about

60% of revenues? • Who are the key players in the NGS services market for now? • What is attractive about Pacific Biosciences’ single-molecule

sequencer? • What will be the impact of low-cost systems?

• Will the market expand into clinical diagnostic applications?

About the AuthorKen Rubenstein, PhD, a biochemist and molecular biologist, received his PhD at the University of Wisconsin and postdoctoral training

at the University of Pennsylvania School Of Medicine. He was a key innovator and research manager for Syva Company, the diagnostics branch of Syntex Corporation. During his 13 years with Syva, Dr. Rubenstein became vice president, scientific affairs, and a function that included strategic planning. Since 1983, he has served as a technology and marketing consultant to biomedical companies and an industry analyst, with more than 40 published studies to his credit.

Included in this report: • 125 pages

• 35 Charts, Graphs and Figures

• Over 60 Companies

• Exclusive content not available in any other research report.

Exclusive to Insight Pharma Reports:

• Plus! Access to the 2011 Beyond Sequencing Presentation Slides.

Only available through Insight Pharma Reports.

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navigation, search, bookmarks, download options, and additional

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Sample Exhibits from Insight Pharma Reports’ User Survey

Moderately 25.0%

Mildly 8.8%

Not at all 5.9%

Quite a lot 30.9%

Very much 29.4%

If not currently doing single-molecule sequencing, my organization is interested to the following extent:

Table 5.17. Future Interest in Single-Molecule Sequencing

Source: Insight Pharma Reports

Table 5.10. Application Areas

Application areas are (multiple answers permitted)

Selection Count Percentage

Genome-wide association studies 48 63.2

Targeted gene-disease association studies 48 63.2

Epigenomics/epigenetics 36 47.4

Microbiome sequencing 34 44.7

Diagnostics 26 34.2

Other 18 23.7

Totals n=76 100.0

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ExEcutivE SummaRyEvolution of NGS technologiesState of the artSystems and technologies on the horizonMarket dynamics

chaPtER 1 Introduction1.1 Scope and contents of this report

chaPtER 2 Evolution of NGS2.1 Classical sequencing and early applications2.2 The Human Genome Project2.3 First-generation sequencing2.4 The Omics Era and the search for gene-disease associations2.5 Origins and early development of next-generation sequencers

chaPtER 3 State of the Art3.1 Technologies currently on, or very near, the market Illumina Life Technologies Complete Genomics Roche/454 Life Sciences Helicos BioSciences Pacific Biosciences Ion Torrent3.2 Comparative performance of systems currently on the market or nearly so3.3 Bioinformatics3.4 Sample preparation

chaPtER 4 Systems and Technologies on the Horizon4.1 Corporate programs Illumina Avantome Oxford Nanopore Technologies Electronic Bio Sciences General Electric Global Research GnuBio BioNanomatrix Halcyon Molecular IBM Intelligent Bio-Systems Life Technologies Starlight LightSpeed Genomics NABsys NobleGen ZS Genetics4.2 Academic contributions Graphene Nanopores Other nanopore work

chaPtER 5 Market Dynamics5.1 Competitive environment in the sequencing market through 20115.2 Possible scenario through 20125.3 Prospects for diagnostic applications of NGS 5.4 Deals and deal patterns5.5 User survey results and discussion Identification of respondents Nature of NGS activities Informatics activities Sequencer attributes

Report Contents

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chaPtER 6 Conclusions and Trends6.1 Sequencing—The Next Generation6.2 Translational medicine aspects of NGS Sample handling Data handling

chaPtER 7 Interview TranscriptsGeoffrey Barrall, Ph.D., President, Electronic BioSciencesStephen Turner, Ph.D., Founder and CTO, Pacific BiosciencesClifford Baron, Director Biology Product Marketing, AccelrysClifford Reid, Ph.D., Co-Founder, President, CEO, and Chairman, Complete GenomicsJeffery Schloss, Ph.D., Program Director, U.S. National Human Genome Research InstituteTodd Smith, CTO, Geospiza

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tablES anD FiguRESFigure 2.1 Sanger sequencing methodologyFigure 3.1 Principles and workflow for Illumina sequencingFigure 3.2 The SOLiD sequencing by ligation principleFigure 3.3 Roche/454 original sample preparation and sequencing schemeFigure 3.4 Pacific Biosciences single-molecule sequencing principleFigure 3.5 Life Technologies SOLiD system software supportFigure 3.6 Principle of the Agilent SureSelect Target Enrichment systemFigure 3.7 The RainDance Technologies RDT 1000 sample enrichment systemFigure 3.8 Overview of Nextera fragmentation and tagging technologyFigure 4.1 Oxford Nanopore exonuclease sequencing principleFigure 4.2 The principle underlying NobleGen’s sequencing technologyTable 3.1 Performance comparison estimates for systems currently on the market or launched as of October 2010 (for fragment, not mate-paired reads)Table 5.1 NGS deals relating to sequencing instrumentationTable 5.2 NGS deals relating to informaticsTable 5.3 NGS deals relating to sample preparation

RESultS FRom inSight PhaRma REPoRtS’ uSER SuRvEy Table 5.4 In-house vs. outsourceTable 5.5 Type of institutionTable 5.6 Type of sequencing facilityTable 5.7 Position in the organizationTable 5.8 Sequencing focusTable 5.9 Organisms sequencedTable 5.10 Application areasTable 5.11 Informatics sourcesTable 5.12 Sequencer attribute rankingsTable 5.13 Low-cost sequencer acquisitionTable 5.14 Low-cost sequence selectionTable 5.15 Single-molecule sequencing participationTable 5.16 Pacific Biosciences’ system plansTable 5.17 Future interest in single-molecule sequencingTable 5.18 Nanopore sequencer timingTable 5.19 Desired nanopore system attributes

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Insight Pharma Reports are used by senior decision makers at life sciences companies to keep abreast of the latest advances in pharmaceutical R&D, their potential applications and business impacts. Our clients include the top 50 pharmaceutical companies, top 100 biotechnology companies, and top 100 vendors of life science products and services. Typical purchasers are managers, directors, and VPs in business development, discovery research, clinical development, strategic planing, portfolio management, new product planning, and marketing.

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