In 1984, Applied Biosystems introduced the first DNA sequencer, revolutionizing genomic analysis. Amersham Biosciences (now GE Healthcare), Beckman Coulter and other companies followed, creating a market estimated at more than $800 million. The most widely used technology for DNA sequencing is a capillary electrophoresis–based (CE) system employing the Sanger method. Although chemistries and automation advances have made DNA sequencing easier and faster, the basic technology has remained essentially the same. Technology maturation, as well as the high costs of CE sequencing and market saturation, have slowed growth opportunities in the DNA sequencing market in recent years. In fiscal 2004 and 2005, sales for Applied Biosystems’ DNA Sequencing business declined 9% and 5%, respectively.

In recent years, the market for DNA sequencing has shifted, moving from large-scale de novo sequencing projects to resequencing applications. These applications include whole-genome resequencing, targeted resequencing and tag sequencing. In most cases, shorter read lengths can be used in such applications. By producing shorter read lengths, current next-generation technologies are able to provide faster and cheaper sequencing. In addition, simpler sample preparation, parallel reactions and miniaturization have enabled higher throughput and reduced reagent usage.

In 2005, 454 Life Sciences introduced the first next-generation sequencing systems. Distributed by Roche Diagnostics and promising a sequencing run time 100 times faster than CE systems, the GS 20 built an installed base of more than 60 systems less than two years after its launch. The system’s rapid adoption was evidence of the market opportunity for new sequencing technology—a fact that other companies quickly recognized. In developing its own next-generation system, Applied Biosystems acquired Agencourt Personal Genomics (see IBO 5/31/06) last year. Illumina purchased Solexa and its next-generation sequencing technology in 2006 (see IBO 11/15/06). Earlier this year, Roche Diagnostics agreed to acquire 454 Life Sciences (see IBO 3/31/07).

By enabling faster, simpler and more cost-effective sequencing, current next-generation sequencing technologies can be expected to grow the DNA sequencer market. The new sequencing technologies augment or replace Sanger sequencing for existing applications, as well as enable new applications. As a result, they have the potential to further open the market to smaller academic labs, pharmaceutical and biotech labs, and applied applications in the commercial sector. In this way, next-generation DNA sequencers are rejuvenating the market by increasing the number of applications and users. However, the extent to which the market can grow to support the influx of new systems is not yet known, and with other new sequencing technologies promising even further technical advances expected to be commercialized shortly, competition will only increase. As a result, companies are not only emphasizing the flexibility of their next-generation systems for multiple applications, but also how their systems are unique.

This summer, Applied Biosystems will introduce to early-phase customers the SOLiD (Sequencing by Oligonucleotide Ligation and Detection) system, its next-generation DNA sequencer based on the Agencourt technology. Using ligation-based probes and the simultaneous encoding of base pairs, Applied Biosystems’ technology promises higher accuracy from shorter read lengths. Unlike systems from 454 and Illumina, SOLiD can sequence mate pairs. Mate pairs are two reads from the same clone that are used to assemble a genome in shotgun sequencing. According to Michael Rhodes, applications manager for High-Throughput Discovery at Applied Biosystems, “Not only do we have more accurate SNPs, but we can better detect indels [insertions and deletions], rearrangements and copy number polymorphisms.” Because bases are read directly, SOLiD, as well as Illumina’s technology, are capable of detecting homopolymers, sections of DNA containing the same bases, which can result in misreads. Another advantage, according to Quynh Doan, senior manager at Applied Biosystems, is that laboratories using both the company’s CE system and the SOLiD system will be able to more easily integrate data. “In many applications, it is a hybrid approach. So we’re able to provide both solutions and therefore methods of incorporating both types of data,” she noted.

In fact, Sanger sequencing complements SOLiD sequencing in a number of applications, including de novo sequencing. However, for an application such as deep resequencing, Dr. Rhodes explained, “the advantage we offer with the SOLiD system is that you can actually see lower-frequency alleles.” SOLiD sequencing is also useful for gene expression due to the amount of data it can generate. “[I]t’s that sheer of volume of data that lets you look at the level of frequency of gene expression products. It’s really all about data volume,” explained Dr. Rhodes. Gene expression applications are an example of the discovery applications SOLiD enables. “The customers we speak to, they’re very excited by the opportunity to go and look at the gene expression without any hypothesis,” he explained. “So if there’s a new gene that no one has actually documented, you can do it with sequencing. If you’re doing an organism for which there isn’t an array, then you can do it with sequencing,” he noted. Expanding applications is what will grow the market, according to Dr. Rhodes. “It’s enabling applications and experiments that basically just weren’t possible before.”

Cost is also a paramount factor as researchers choose their next-generation systems. The estimated initial cost for a single run on the SOLiD system is between $3,000 and $3,500, according to Suresh Pisharody, product line manager of SOLiD Reagents for Applied Biosystems. However, the cost is expected to decrease. “Right now, the SOLiD sequencer yields between 20 million to 40 million mappable reads per run. By next year, it could yield up to 80 million reads per run distributed over two slides,” he said. In fact, the scalability of the system is one of its biggest advantages, according to Dr. Rhodes. “[O]ne of the big things about this technology that so excites Applied Biosystems is that it is incredibly expandable. We can foresee doing longer reads, we can foresee doing higher density and we can foresee even greater accuracy,” he asserted.

As the first to market, 454’s system was introduced with much fanfare and accompanied by numerous publications, including the sequencing of the Neanderthal genome. The system has been adopted by researchers at several major sequencing centers, as well as by private companies such as Cogenics, Keygene NV and MWG Biotech AG. Compared to SOLiD and Illumina’s system, the 454 technology boasts longer read lengths, which aid in genome sequence assembly and provide information about haplotypes. Earlier this year, 454 launched the GS FLX system, designed to provide reads averaging 200 to 300 base pairs compared to 100 base pairs generated by the GS 20. Christopher McLeod, president and CEO of 454 Life Sciences, told IBO, “We have made significant improvements in fluidics control, enzyme performance and signal processing that enable us to generate read lengths of more than 230 bases with average single-read accuracy equivalent to Sanger sequencing at 99.5%.” He added, “Improvements in GS FLX allow researchers to conduct studies with fewer runs, high accuracy over longer reads and improved assembly with fewer contigs [contiguously assembled regions].”

The company views its longer reads as an important differentiator. Asked about other next-generation sequencers, he commented, “Most other high-throughput sequencing technologies are not yet commercial, so it is impossible to compare performance. In general, these technologies generate microreads, which are very short read lengths (of only approximately 25 bases), so they would seem most relevant primarily to applications requiring a large number of short reads, such as expression analysis.”

In addition, the company continues to work to bring down the cost of each run. The GS FLX generates an average of 400,000 reads per run in less than eight hours and the reagent cost per single run is less than $8,000, according to Mr. McLeod. “Depending on the required number of bases, or reads, per sample, up to 16 samples can be physically separated and sequenced independently in a single GS FLX run,” he explained. “That translates to less than $500 per sample. With tags, it is possible to run 96 samples in a run, for a cost of less than $10 per sample.”

Mr. McLeod emphasized that the GS FLX supports multiple applications. “As indicated by its name, the GS FLX is an extremely flexible system supporting all sequencing applications, ranging from whole-genome shotgun sequencing to cDNA transcriptome sequencing, to ultradeep sequencing of targeted gene amplicons.” This range of applications is key to growing the market. “With our partner, Roche Diagnostics, we are expanding the market for high-throughput sequencing to research labs of any size. These include commercial organizations, in addition to academic and government research institutes,” said Mr. McLeod. He cites crop sciences and enzyme research among the industrial applications.

The market is also growing, according to Mr. McLeod, as next-generation sequencing is used in applications previously performed with microarrays, such as rare variant detection. “We are also seeing researchers displace array-based technologies with the GS FLX, providing market opportunities that have traditionally been outside of the sequencing area,” he noted. In addition, applications are emerging in evolutionary genomics and clinical research: “New commercial applications include protein evolution and control. In addition, we are seeing demand in our CLIA-certified Sequencing Center from pharmaceutical companies for genotyping patients in clinical trials of drugs, along with the ability to detect somatic mutations in cancer-based studies.”

In January, Illumina’s Genome Analyzer became the first next-generation sequencer to produce one billion bases per run, demonstrating the density and accuracy of its reads. “This milestone marked the end of the platform’s early access phase to full commercial availability,” stated Glenn Powell, director of Product Marketing for Illumina. As of February, Illumina had received 40 orders for the Genome Analyzer.

The Illumina sequencer’s ability to generate such a high volume of data makes it cost effective and suitable for the sequencing of mammalian genomes as well as newer applications. Compared to CE systems, “Solexa technology produces 100 times the data for 1% the cost of capillary systems that enable whole-genome analysis for individual labs and population analysis for larger facilities,” said Mr. Powell. “The Illumina Genome Analyzer has been developed for use in whole-genome sequencing, targeted regional and gene resequencing, digital gene expression, small RNA, or microRNA, analysis plus whole-genome ChIP [chromatin immunoprecipitation on chip] analysis for regulatory protein binding and histone modification expression control.” The system is also competitive with microarray-based sequencing. “Digital gene expression costs on Illumina’s Genome Analyzer are equivalent to total hybridization array approaches,” he noted. “Transcription control profiling provides 10 times higher precision at a fraction of the cost of tiling array approaches.”

In growing the market, Illumina will rely on its established presence in the life science market. “We are focused on genome centers, and the addition of the Illumina sales force opens the opportunity to sell more broadly to pharma and, ultimately, into diagnostics,” said Mr. Powell.

New DNA sequencers from Applied Biosystems, 454 and Illumina are only the first of the next-generation sequencing technologies. Other technologies under development include nanopore-based systems and single-molecule detection techniques. Applied Biosystems has invested in Eagle Research and Development’s nanopore-based sequencing technology (see IBO 1/31/07) and VisiGen’s single-molecule detection technology (see IBO 10/31/05). And the acquisitions of 454 and Solexa mean that they now have deeper pockets to further develop their technologies. Helicos is planning to ship the first of its single-molecule sequencing systems later this year, and Intelligent Bio-Systems is expected to launch an early-phase version of its sequencing-by-synthesis technology soon. New approaches to CE systems are also being developed. Last fall, Shimadzu launched its DeNOVA-5000HT sequencer in Japan. Codeveloped with Network Biosystems, the ultrahigh-throughput system utilizes BioMEMS technology. It appears that the DNA sequencer market will soon be crowded.