DNA Sequencing

DNA Sequencing Landscape

Supply Market Dynamics

• The overall next-generation sequencing (NGS) market is growing at a double-digit growth rate owing to increasing applications areas of the NGS clinical segment and the rising number of government genomics projects 

• NGS service providers enter into strategic partnerships with contract research organizations (CRO)/academics, pharma/biotech, and diagnostic firms to expand their NGS capabilities. Also, collaboration with NGS data analysis firms such as IT firms is on the rise to provide fully integrated NGS service 

• Government funding for computational genomics encourages advancements in the NGS data analysis sector. For instance, NHGRI, through its Computational Genomics and Data Science Program, funds Genome analysis tools and software resources and data management resources

NGS Services Spend by End-users and Applications

• Even though clinical application is growing, the usage of sequencing for research purposes is still dominating the market making academics and research institutions a major end-user

• NGS services are used along the entire chain from early discovery to clinical trials through predictive biomarkers and patient stratification studies

• Hospitals and clinics are the fastest-growing end-user segment as clinical NGS shows a great promise to develop in the future

• Non-clinical segment is also poised to grow with pharmaceutical companies encouraging strategic partnerships with NGS service providers for bringing in patient-specific treatment regimes

Growth Drivers and Constraints

Drivers

Increasing Demand for Clinical NGS

• The NGS application spectrum is broadening to hospitals and clinics with NGS being performed for diagnosis, treatment and even prevention of diseases. The demand for NGS-based companion diagnostics tools for cancer and infectious diseases is driving the services segment.

• Next-generation sequencing is seeing huge adoption owing to its lower cost, faster speed, and greater accuracy compared to conventional technologies. Also, the technique requires significantly lesser DNA

• Moreover, NGS is finding immense use in drug discovery applications and is an effective replacement for traditional technologies.  

Preference for Outsourcing

• Not every firm performing sequencing services can offer NGS data analysis, as it is a niche area and requires dedicated bioinformatics team to handle the data analysis service. The niche area of NGS data analysis is driving the NGS services segment as buyers are looking for integrated service providers.

Diversified NGS Platforms

• Need for different sequencing platforms for different experiments, as there is no single sequencing platform to perform all set of experiments. The output of each platform is different, which brings in the need for different platforms. Also, the cost of sequencers had drastically reduced in the past few years across major players

Constraints

Lack of Skilled Labor

• The crucial steps of sequencing, such as for sample and library preparation as well as analysis needs expertise. Also, library preparation rely on experience, as it is relatively a manual process and data analysis that involves huge volumes of complex raw data to interpret.

Surging Cost of NGS Reagents

• Even though, the NGS platforms rates have reduced considerably, the cost of reagents is surging up Y-o-Y, which increases the overall cost of NGS sequencing.

Data Accuracy and Standardization

• Even after the introduction of sophisticated sequencers and better consumables, standardization of NGS data is still a bottleneck to the market growth of NGS platforms

COVID-19 Impact on DNA Sequencing Market

• The COVID-19 crisis has triggered the adoption of NGS technology in the diagnosis of infections owing to its optimal accuracy and efficiency. The Food and Drug Administration (FDA) has granted an emergency use approval to Ilumina Inc. for its COVIDSeq test - the first COVID-19 diagnostic kit based on NGS. 

• The benefit of leveraging an NGS test is that the approach offers information about the presence of the virus as well as its genomic sequence in a sample. This genomic data can be beneficial for research purposes as well thus boding well for the DNA sequencing market size.

Outsourcing Adoption Rate

• NGS is outsourced at an approximate rate of 60–65% in 2017. It is mainly driven by high-cost infrastructure and the expertise requirement for NGS services

• Downsizing by pharma/biotech firms, decreasing research and development funding, and focus on core competencies are the key factors driving outsourcing

• Though the supplier fee for an outsourced service is high, reduction in fixed costs over the long term is far beneficial

• Drug discovery and development is still one of the prime areas to be outsourced among the non-clinical application segments. However, clinical application would see a vast increase in outsourcing rate in the upcoming years

• Pharma and biotech companies are the largest end-user segment that outsources the NGS services to reduce the overall fixed cost and improve the operational efficiency for NGS services

• Outsourcing enables access to best-in-class technologies through the latest array of sequencers, such as oxford nanopore and also integrated services along with data interpretation and storage

Changing regulatory scenario, CRO dynamics, risk sharing models, technologies are the key areas impacting early phase trial conduct in the next-generation sequencing market. Buyers have to ensure suppliers have regional regulatory expertise, therapeutic, operational capability and innovative technologies to handle the complex trials. Upon assurance, a full-service strategic partnership could be formed.

DNA Sequencing Market Trends

• Changing regulatory scenarios, CRO dynamics, risk-sharing models, technologies are the key areas impacting early-phase trials conducted in the next-generation sequencing market. Buyers have to ensure suppliers have regional regulatory expertise, therapeutic, operational capability and innovative technologies to handle the complex trials. Upon assurance, a full-service strategic partnership could be formed.

• The field of medicine is witnessing numerous tech advancements that are flourishing at a breakneck speed and have triggered the development of personalized drugs and medicine. NGS finds huge applications in personalized medicine, a trend setting high hopes for market players.

Market Overview

• Next Generation Sequencing Market Size Growth: Market Revenue (2017): 5.1 $Billion, CAGR growth rate: 19.5-20.5 percent by 2022.
• Pricing Models used in the next generation sequencers market: Most Preferred: Fixed Unit Price and FFS, Alternate Models: Project-based, FTE, Time, and Materials.
• Engagement model used in the next-generation sequencing market: Most Preferred: Project-based and Preferred Partnerships, Alternate Models: Strategic Partnerships.
• NGS was outsourced at an approximate rate of 60–65 percent in 2017. It is mainly driven by high cost infrastructure and the expertise requirement for NGS services.
• The major industry trends in the next generation sequencing market: Strategic partnership for data-driven solutions and end to end solutions to customers.
• The regional revenue split in the global next-generation sequencing market: North America accounted for the largest share of the market in 2017 followed by Europe. Emerging Markets include: China, India, Eastern Europe.
• Specialized sequencing service providers eye on large pharmaceutical firms as the volume of work by these firms are high, generating additional revenue and bringing in brand visibility. 

Why You Should Buy This Report

• The report gives details on the next generation sequencing market size, trends, growth drivers and constraints and the Porter’s five force analysis.
• It gives information on the NGS platforms, top suppliers and sourcing, pricing and engagement models in the next-generation sequencing market. 
• It provides a competitive intelligence report on the major industry cases and important deals between suppliers and buyers in the next generation sequencers market.