DNA SEQUENCING MARKET - Emerging Technologies & Applications

INTRODUCTION

Since its commercial introduction more than a decade ago, next-generation sequencing (NGS) has matured into an essential life science tool for genetic studies in a range of applications. BCC Research recently reported that the NGS industry is on the cusp of a second growth phase, powered by new applications in clinical diagnostics.

The worldwide market for sequencing products is forecast to grow at a 5-year compound annual growth rate (CAGR) of 18.7% to reach nearly $13.8 billion by 2020. The market can be segmented into pre- and post-sequencing products (ie, sample preparation reagents/kits and informatics, respectively), sequencing instruments and consumables, and sequencing services.

Sequencing services is the largest and fastest-growing segment, with an anticipated 5-year CAGR of 26%. BCC Research forecasts the value of the sequencing services segment to exceed $9 billion by 2020. The high growth rate is due to a number of factors, including the expansion of sequencing into new applications in the clinical and applied market segments.

The main clinical applications driving market growth are cancer and reproductive health. The other main clinical sequencing applications through 2020 include Mendelian disorders, infectious diseases, and complex disorders.

Cancer Applications
The main cancer applications for NGS diagnostics include tumor sequencing, familial screening, monitoring for cancer recurrence, and liquid biopsy. Cancer diagnostics that provide the genetic profile of a tumor can have an influence on which therapy is chosen. This is a critical driving force behind NGS-based tumor sequencing diagnostics. The key issue for this application is establishing a clinical connection between a given tumor mutation profile and an effective therapy. It is believed, however, that many large-scale sequencing projects are addressing this issue and that significant progress is being made.

Current applications for NGS in cancer are focused on discrete sets of genes. However, BCC Research believes that whole exome and whole genome sequencing will gain traction in the future as sequencing costs fall and the value of testing for only a single gene or several genes declines. Longer term, it is expected that most tumors will be completely sequenced, giving physicians full genetic information for treating their patients.

The second application for cancer is familial screening of relatives of patients with cancer and those who may otherwise be at high risk. The key driving force for this application is a reduction in sequencing costs to the point where there are significant cost-benefit advantages for NGS tests. A second driving force in familial screening is breakout into the general population. There is evidence that many people who have no family history of cancer can carry risk mutations. Because most people at risk will not undergo NGS-based screening tests without insurance reimbursement, costs must continue to decrease and clinical validity must be established.

Monitoring is a key application for liquid biopsy formats. Monitoring during the course of treatment is desirable because it can assess tumor growth, metastases, or resistance to therapy. Monitoring during therapy also allows physicians to make adjustments based on the changing genetic profile of the tumor. For cancer monitoring, the early commercial tests are gene-specific quantitative tests. However, the industry is evolving toward multigene panels that cover clinically actionable mutations in a range of genes and cancer types.

Monitoring post-treatment focuses on finding minimal residual disease or cancer relapse. Liquid biopsies for monitoring recurrence are designed to detect low levels of tumor mutation and to measure tumor mutation quantities over time to assess cancer recurrence. More than 95% of all cancer deaths worldwide happen after relapse. Finally, NGS-based tests that can help choose appropriate patients to enroll in clinical trials, as well as once a new drug enters the market, will help in the selection of treatment based on a patient’s genetic profile.

Mendelian Disorders Applications
NGS diagnostics are used for difficult-to-diagnose rare genetic diseases, with multiple tests on the market. The key driving force for this application is deficiencies in conventional approaches. Diagnostic odysseys occur when an individual has a rare genetic disorder and undergoes many expensive and invasive clinical tests and procedures to determine the cause. These cases frequently occur in clinics that evaluate children for such things as cognitive impairment, neuromuscular disorders, or congenital anomalies.

Diagnostic odysseys often include serial molecular testing of one or a few genes, running up the costs of diagnosis. Many of these rare genetic diseases are due to a single-gene mutation in the genome. They are referred to as Mendelian disorders because they comport with the inheritance pattern first discovered by Gregor Mendel.

BCC Research believes there are as many as 25 million individuals in the US who have inherited Mendelian disorders. Some of these are well understood, including cystic fibrosis and muscular dystrophy, but others are much rarer. There are approximately 6,000 of these very rare disorders, and only half of them have been identified. NGS is changing the diagnostic paradigm in these cases because it can rapidly and more cost-effectively deliver a correct diagnosis than conventional approaches.

The key advantage of NGS is that it is highly multiplexed to cover many genes in one test format, including genes for which no commercial molecular test exists. One of the key challenges to implementing NGS for this application is demonstrating to the medical community the clinical value of such test formats. BCC Research believes that this challenge is being aggressively addressed by a number of leading institutions in this field, as well as by several high-profile initiatives.

Reproductive Health Applications
The non-invasive prenatal screening (NIPT) market has been a major success story in the industry. The main clinical benefit of the non-invasive test format is a reduction in the number of unnecessary invasive procedures, which in turn results in less risk of resultant miscarriage. A secondary clinical benefit is an earlier diagnosis of fetal aneuploidy. NIPT is experiencing a high adoption rate among women at high risk of having babies with chromosomal abnormalities.

Since the introduction of initial tests, providers have sought to expand their testing menus. This is a key strategy to getting higher market share in the at-risk population. A key issue that will impact the future market potential is whether or not NIPT will be adopted by the average-risk patient population. For this to happen, insurance providers and other payor groups will need to recognize a clear clinical benefit to screening this population segment.

For newborn screening, NGS offers much promise, assuming that it continues down the cost curve. The key driving force for this application is the decline in costs of sequencing and associated informatics. For commercial success, it is critical to demonstrate that NGS tests can provide more relevant clinical genetic information at a price point lower than that of the current methods. If this can be done over the next few years, it is likely that insurance companies will come onboard, and a viable market will result.

There are ethical issues associated with NIPT and newborn screening, many of which will be resolved over time as the tests mature and there is greater experience among the screening population and physicians. For many disorders, the phenotype is hard to predict, and as a result, it may not correlate with sequencing data. This would limit the ability of the physician to make informed decisions based on a sequencing test.

There is also the problem of trying to implement a set of informed consent and genetic counseling guidelines for non-invasive testing. This is particularly true for broad-based sequencing tests, for which there are many variants of unknown significance that make interpretation difficult. A final issue is the potential impact of NIPT tests on abortions. These ethical issues have not prevented the high growth of NGS-based tests for prenatal screening. BCC Research views the ethical issues as interesting to consider, but they have little impact on the market for these tests.

NGS is newly emerging for preimplantation screening, driven by the increased success rates of in vitro fertilization applications. A main hurdle is offering these tests at an attractive price point versus microarray methods, and thereby increasing the penetration of NGS. The tests do not rely on insurance coverage because they are offered with direct payment from the patient. This feature has attracted the interest of a significant number of companies. Both NGS and microarray-based tests evaluate chromosomal aneuploidy, with screening for single-gene disorders also emerging for these tests.

Infectious Disease Applications
The main applications of NGS diagnostics for infectious diseases include outbreak tracking and human immunodeficiency virus (HIV) tropism. In outbreak tracking, the use of NGS to diagnose patients who are hospitalized with foodborne infections is viewed as a near-term point of entry. A positive development for this application is the use of MiSeq in regional laboratories throughout the US to track foodborne pathogens and outbreaks. This is being done under a pilot program sponsored by the FDA.

A main obstacle to commercialization will be the education of clinicians regarding the benefits of using NGS tools to quickly identify pathogen strains so that effective treatments can be implemented. Because the initial application will be for hospitalized patients, it will be important for developers to market the new tests appropriately to critical care physicians and to contrast the benefits of NGS with older methods. NGS must compete with both polymerase chain reaction (PCR) and Sanger sequencing to meaningfully penetrate the infectious disease market.

One application in which NGS has shown near-term commercial promise is HIV tropism testing. The genotypic assay uses Sanger sequencing, which is the gold standard for HIV tropism testing. However, NGS provides a better detection limit, such that mutations at lower allele frequencies can be detected. These lower-frequency mutations may be important in predicting drug resistance. It is thought that frequencies as low as 1% may influence drug sensitivity, and the present limit of Sanger sequencing is 20% frequency.

Complex Disorders Applications
Complex disorders applications include immune system disorders, metabolic/mitochondrial disorders, cardiovascular diseases, and neurological diseases. Genetic factors may play only a minor role in some diseases, limiting the impact of NGS as a diagnostic. For other diseases, genetics may well play an important role. It is likely that as new knowledge is gained regarding the genetic basis for these diseases, the need for NGS diagnostics will increase.

For immune system disorders, the main applications include immune system profiling, human leukocyte antigen (HLA) typing, rheumatoid arthritis (RA), and multiple sclerosis (MS). In the field of immune system profiling, NGS is making progress through commercial assays and research. Although Sanger sequencing is the current standard of care for high-resolution HLA typing, NGS assays provide rapid, high-resolution typing at a competitive cost. Research into the genetic underpinnings of RA and MS is ongoing, and NGS technologies are useful tools in this effort. As this research progresses, it is expected that new molecular diagnostics will be developed, some of which will use NGS formats.

Mitochondrial disorders are difficult to diagnose because they have complex genetic causes and a wide range of phenotypes, making these diseases well suited for NGS diagnostics. For this market segment, single-gene tests do not provide enough information, and whole exome sequencing is too costly and overkill. For metabolic/mitochondrial disorders, a key driving force is deficiencies in conventional approaches.

Cardiovascular and neurological disorders comprise a strong potential future market for NGS diagnostics. NGS tools have been used to show that breakdown in the control of gene expression may help to initiate or progress some of these diseases. The market for NGS diagnostics will come to fruition when clinical research can correlate genetic changes with the risk of disease onset or progression.

CLINICAL SEQUENCING TECHNOLOGY CHALLENGES

Many challenges must be overcome for NGS to be widely adopted in the clinical setting. Sequencing costs must continue to decline at the rate predicted by Moore’s law. Price points are bringing NGS into broader competition with other molecular diagnostic technologies, such as PCR, microarrays, and lab-on-a-chip. Insurance coverage must continue to expand for NGS-based tests. There is evidence of increasing coverage by payors in some key NGS clinical markets, including NIPT and cancer.

Genetic testing generates data specific to each patient, and there are social and ethical concerns about the means to secure the privacy of these data, as well as who can access it. These questions will become more important as the clinical test market grows and as more complex tests, including those based on whole genome sequencing, are introduced.

Informatics is a key technical challenge for NGS diagnostics. For NGS data to be clinically actionable, it must be analyzed, correctly interpreted, and put into a simple report format for physician use. The time and resources required for handling and storing large amounts of genetic data remain a key bottleneck in the industry. Because of this, the informatics industry will be a critical factor in the future success of NGS diagnostics.

This article is based on the following market analysis report published by BCC Research: DNA Sequencing: Emerging Technologies and Applications (BIO045F) by John Bergin. For more information, visit www.bccresearch.com.

To view this issue and all back issues online, please visit www.drug-dev.com.

John Bergin has held business development, sales, and marketing positions with a Fortune 500 advanced materials company, as well as executive management positions with an emerging nanotechnology company. Mr. Bergin earned his BS in Chemistry, his MS in Biotechnology, and an MBA.

Laurie L. Sullivan, ELS, is a Boston-based writer and editor with 20 years of experience in medical communications. She is certified by the Board of Editors in the Life Sciences. She contributes regularly to the BCC Research blog focusing on Life Sciences.