Next Generation Sequencing Landscape
Supply Market Dynamics
The overall NGS market is growing at a double digit growth rate, owing to increasing applications areas of NGS clinical segment and rising number of government genomics projects
NGS service providers enter into strategic partnerships with academics/CRO’s, 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. E.g., 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 is 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
Increasing Demand for Clinical NGS
- 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 tool for cancer and infectious diseases is driving services segment.
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
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
Outsourcing Adoption Rate
- NGS is 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
- 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 outsource 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