CEO SUMMARY: Pathologists and clinical lab managers interested in following the advances in use of whole human genome sequencing for clinical purposes should follow the money. Within weeks of obtaining FDA clearance for its MiSeqDx system and reagents, Illumina had inked major agreements with Quest Diagnostics Incorporated and Laboratory Corporation of America. Both national lab companies plan to develop and offer next-generation gene sequencing LDTs for clinical use.
FAST-MOVING EVENTS signal that whole human genome sequencing is poised to make a big entry into clinical diagnostics. This has the potential to disrupt the diagnostic standard of care for a growing number of diseases and health conditions.
Much of this activity is happening off the radar screen of clinical lab administrators and pathologists. Yet it is important for them to track these developments because of their potential to disrupt existing lines of clinical lab tests and anatomic pathology services.
Quick Market Response
A simple timeline shows how quickly market players are responding to advances in whole human genome sequencing:
- November 19, 2013—FDA clears four of Illumina Inc.’s next-generation gene sequencing devices for clinical diagnostic uses. Two clearances are for Illumina’s MiSeqDx instrument and its Universal Kit reagents for this instrument. The FDA, in its press release, described these as “the first FDA-regulated test system that allows laboratories to develop and validate sequencing of any part of patient’s genome.”
- November 19, 2013—The National Institutes of Health issues a statement by its Director, Francis S. Collins, M.D., Ph.D., about the FDA’s action. In part, Collins stated that “In a landmark move that will help to realize the promise of personalized medicine, the U.S. Food and Drug Administration (FDA) today announced the first regulatory clearance of a high-throughput DNA sequencing device… Specifically, the FDA authorized broad clinical use of Illumina MiSeq Dx…”
- January 9, 2014—Illumina reveals that it has signed a multi-year licensing agreement with Quest Diagnostics Incorporated giving the lab company access to Illumina’s MiSeqDx instrument and reagents “to develop, validate, and offer molecular laboratory-developed tests… to clinicians in the United States” and for clinical trials testing.
- January 21, 2014—Illumina announces a multi-year agreement with Laboratory Corporation of America that extends rights to LabCorp to use Illumina’s MiSeq DX instrument and reagents “to develop, validate, and introduce laboratory-developed tests to clinicians in the United States and Canada.”
Response to FDA Clearance
All of these developments were linked to the FDA’s clearance of Illumina’s MiSeqDx system and reagents in November. But Quest Diagnostics did not stop there. On January 9, the same day that Quest’s agreement with Illumina was announced, another Quest deal was made public.
On that date, Life Technologies issued a press release announcing its own multi-year agreement with Quest Diagnostics. This deal gave the lab company rights “to develop molecular tests on the company’s Ion Torrent next-generation sequencing platform.”
January 9 continued to be a busy day for Quest Diagnostics. In a related development, it issued a press release on that date disclosing that it had entered into a collaboration with the University of California San Francisco. In another gene sequencing deal, Quest stated that the two parties “formed a collaboration to accelerate the translation of biomedical research into advanced diagnostics in the field of precision medicine, for improved patient care, treatment and outcomes.”
What is noteworthy in these series of events is the speed with which both Quest Diagnostics and LabCorp responded to the FDA’s clearance of Illumina’s gene sequencing platform and reagents for clinical applications. They will be investing millions of dollars in their respective efforts to use this next-generation gene sequencing technology to develop laboratory-developed tests (LDTs) for clinical use.
In its coverage of the FDA clearance for the MiSeqDx system, the Los Angeles Times wrote that the system records “the entire sequence of a person’s DNA in a massively parallel fashion, completing the job in a matter of hours. The company intends to market the machine to diagnostic labs, medical centers and private practices, at a price slightly more than $125,000.”
By contrast, Illumina has priced its HiSeq X Ten instrument system at $10 million. It can generate as much as 3.6 terrabytes of data in six days. Illumina stated that the throughput of this system is 18,000 whole human genomes per year.
At that volume, Illumina says that each whole human genome will cost about $1,000. However, clinical labs will incur additional expenses to assess the resulting gene data and develop a report of clinically-actionable information for physicians who are treating patients.
Assessing Pace of Change
It would be wrong to judge the pace of change in next-generation gene sequencing exclusively on the FDA clearance of the Illumina system, reagents, and tests, in tandem with the speedy response of the national lab companies to acquire these products. That’s because Illumina has plenty of competition and other companies are making their own technology breakthroughs.
After all, Thermo Fisher Scientific just paid approximately $13.6 billion, plus the assumption of $1.5 billion in debt, to acquire Life Technologies and its Ion Torrent system. That deal was closed in early February.
Sequencing Costs Shrinking
What is probably most relevant to the interests of pathologists and lab administrators is the fact that the overall cost of sequencing a base pair continues to fall faster than predicted by Moore’s Law. This makes it possible for a host of companies in the gene-sequence market to offer systems that are less expensive, more accurate, and simpler to use.
In turn, these more affordable and productive gene sequencing systems will make it easier for clinical laboratories and pathology groups to establish their own sequencing capabilities. However, there is one other factor that comes into play.
That factor is the analysis of the gene sequences and the ability to take that data and convert it into actionable clinical information for the physicians treating patients. None of the press releases announcing the series of events earlier addressed how the buyers and users of these gene sequencing systems intended to take the raw DNA sequence data and produce actionable clinical information.
Sequencing Whole Genomes
Just as the cost of sequencing a base pair is falling at a dramatic pace, there is a comparable geometric increase in the number of whole human sequences that exist in data- bases across the globe. This will have a separate impact on labs that want to offer gene sequencing services for clinical applications.
Clinical labs and pathology groups developing clinical gene sequencing services will need to have capabilities in capturing the data and analyzing it. This need has been recognized. A growing number of companies are entering the market and offering to process genomic data, annotate it, and identify clinically-relevant mutations.
These are a few of the reasons why it is not quite “prime time” for local labs to enter the whole human genome sequencing arena. Yet, because of the spectacular pace of innovation, all labs should be watching and ready to move when the combination of price and clinical utility makes it feasible to set up and offer these services.
Illumina Jumps into Lead for Market Share, Sales
ONE EXPERT OBSERVER BELIEVES that Illumina, Inc. “has cemented its position as the dominant player in genomics, at what you could call the beginning of the age of genomic medicine.”
Luke Timmerman, a journalist, wrote that statement for xconomy.com. He noted that, although Illumina currently has annual revenue of $1.42 billion, it has told the investment community that “it sees a total addressable market [for next-generation gene sequencing] ahead of $20 billion.” Of this market, a Goldman Sachs analyst has told his clients that Illumina is positioned to capture 75% of the market through 2020.
One smart thing that Illumina has done is establish a product line that has a price point for every customer. It has five different “models” available, but only the MiSeqDx has been cleared by the FDA for developing laboratory-developed tests that can be used for clinical purposes.
Illumina, based in San Diego, was founded in 1998 and completed its initial public offering in 2000. Its stock trades on NASDAQ under the symbol: ILMN. In January, 2012, Hoffmann-La Roche made an unsolicited bid to buy Illumina for a price per share that would total $5.7 billion. That acquisition attempt was unsuccessful.