Next Generation Sequencing (NGS) Market Size, Growth and …€¦ · Next Generation Sequencing (NGS) Market Size, Growth and Trends (2016-2022) –Table of Contents September 26th,,

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NGS2019 – 13PFP

Next Generation Sequencing

(NGS) Market Size, Growth and

Trends (2016-2022)

– Table of Contents

September 26th,, 20195th edition

Information contained in this market report is believed to be reliable

at the time of publication. DeciBio is not soliciting any action based

on the information contained in this report. See appendix section for

complete disclosures.

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Agenda

• Table of Contents

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We forecast that the NGS manufacturer market will reach $4.4B in 2019, and

grow at 14% p.a. to $6.5B in 2022, driven by clinical applications (1 of 2)

Note: * Including third generation sequencing (single molecule NGS [e.g., Pacific Biosciences, Oxford Nanopore])

** Based on a comprehensive market model (see slide 11 in downloadable Table of Contents)

*** 4 additional players are modelled separately: ONT, BGI, QIAGEN, and Genapsys; other players (e.g., Agilent, NEB, Archer Dx) are modelled as a basket

Next Generation Sequencing (NGS)* has transformed the life sciences and diagnostics landscapes. This technology is used for

applications including human whole genome sequencing (WGS), whole exome sequencing (WES; 1-2% of the genome that

encodes proteins), targeted sequencing using panels of a few-to-thousands of genes, and expression profiling (i.e., RNA-Seq).

We forecast that the manufacturer market size will reach ~$4.4B in 2019, and grow at 14% p.a. to $6.5B in 2022, driven primarily

by adoption from clinical customers worldwide**. NGS has revolutionized not only medical research in academic laboratories and

biopharma, but also the health care landscape and applied markets (e.g., AgBio, food testing).

The fifth edition of this report reviews the market size, segmentation, growth and trends of the manufacturer NGS (i.e., excluding

NGS services [e.g., Foundation Medicine]) market. We assess the NGS market across 6 segments:

• Company: Illumina, Thermo Fisher (Ion Torrent), Roche (Kapa Bio, Genia), Pacific Biosciences, and others***

• Product Type: Instruments (including software) and Reagents (including consumables)

• Customer: Academic Basic Research, Population Studies, Biopharma R&D, Biopharma Clinical Trials, Liquid Biopsy

Clinical Trials, Clinical Diagnostics (Oncology), Clinical Diagnostics (NIPT), Clinical Diagnostics (All other), Liquid Biopsy

(Dx), Applied Markets, Industry

• Application: Human WGS, WES, Targeted Resequencing, RNA-Seq, Other

• Therapeutic Area: Genomics, Oncology, Infectious Diseases, Method Development, and Others

• Geography: U.S., Europe, China, Asia/Pacific (APAC), and Rest of the world (RoW)

For each segments, we provide the market size in 2016, 2019 and 2022, and commentary on key growth drivers and moderators.

Major factors driving future growth include:

• Accelerating adoption in clinical settings (both in clinical trial and routine testing) now representing about half of the market,

especially for clinical oncology across the patient journey from early (asymptomatic) detection (in trial stages at GRAIL,

Freenome, etc) to therapy selection (e.g., Guardant Health, Foundation Medicine), or therapy monitoring and cancer

recurrence testing (e.g., Natera)

• Increased reagent usage on an expanding instrument installed base across applications, especially for higher throughput

instruments (i.e., NovaSeq)

• Increased adoption of the technology by new customers (e.g., Applied markets such as AgBio, Biopharma for patient

stratification during clinical trials)

• Increased usage for new scientific applications built upon sequencing detection (e.g., [single cell] RNA-Seq, ChIP-Seq,

methylation studies, spatial profiling on NanoString GeoMx)

Abstract

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We forecast that the NGS manufacturer market will reach $4.4B in 2019, and

grow at 14% p.a. to $6.5B in 2022, driven by clinical applications (2 of 2)

Key factors moderating growth include:

• Excess capacity: previously installed instruments operating at 10-30% of capacity

• Pricing pressure has decreased cost per Gb moderating overall revenue growth, due to competitive pressure (particularly

from MGI), and the availability of more affordable instrument options (e.g., Illumina’s iSeq, Oxford Nanopore’s Flongle)

• Reimbursement uncertainty and pushback in clinical settings (due in part to lack of education even in some cases where

tests are covered by insurance companies) limiting access to the vast majority of clinical samples in the U.S.

• Out-of-pocket pay for some tests (60-80%) in China limiting adoption

• Continued bioinformatics and data analysis challenges, especially for structural variants or translational and clinical

applications (e.g., clinical variant interpretation), gating access to most potentially addressable samples

• Low growth in research funding in established markets

We also review interesting market trends, such as:

• Increased use of native long read technologies, most notably Oxford Nanopore

• Increased number (and scale) of population sequencing programs (e.g., Korea planning to sequence 1M genomes by 2029)

• Diversification of sequencing options driven by the launch of multiple new platforms by new players (e.g., BGI’s T7, Oxford

Nanopore’s PromethION, Genapsys GENIUS), and many additional companies with novel sequencers

• Consolidation of applications on increasingly differentiated platforms, based on their workflow, turnaround time and cost

(e.g., human WGS on NovaSeq, field-based pathogen sequencing on the MinION)

• Simplification of the overall workflow, with the launch of more automated instruments (e.g., S5) or automated sample

preparation instruments (e.g., Ion Chef, NeoPrep, VolTRAX), saving time, and increasing reproducibility

• Continued decentralization of sequencing runs driven by the availability of low cost desktop sequencers (e.g., MiSeq), but in

turn a centralization of sequencing volumes as high throughput platforms can cost-effectively run 10,000’s of samples

• Increasing use of service providers offering an alternative to in-house platform adoption, as many customers don’t have the

budget for or interest in large capital expenditures for such fast-evolving technologies

• Increasing number of players participating in this fast growing market, typically offering front end (sample preparation) or

backend (bioinformatics) solutions, with most targeting (clinical) oncology

• Increasing competitive intensity on dimensions others than cost per base pair (e.g., workflow, portability, clinical content)

Disclaimer: Some of the companies listed in this report may be DeciBio clients or customers

Abstract

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This report is divided into the following sections

Introduction 2

Abstract 3

Table of Contents 5

4th Edition: What’s New? 6

Included / Excluded Technologies 7

Definitions & Methodologies 8

NGS Competitive Landscape 65

NGS Market by Competitor 66

NGS Manufacturer Market Positioning 67

Illumina 68

Thermo-Fisher 72

Roche 76

Pac-Bio 78

Long Read Solutions 82

Other Key Players 83

MGI 84

Oxford Nanopore 88

QIAGEN 93

Genapsys 95

Agilent (LaserGen) 96

NanoString 97

Other Select Players 98

Table of Contents

Executive Summary 13

NGS Market by Customers Type 14

NGS Market by Product Type 15

NGS Market by Application 16

NGS Market by Therapeutic Area 17

NGS Market by Competitor 18

NGS Market Analysis 19

NGS Market by Customer Type 20

NGS Market by Product Type 34

NGS Market by Application 39

NGS Market by Therapeutic Area 47

NGS Market by Geography 62

Appendix 108

NGS Platform Price & Performance 109

Abbreviations 110

Disclosure 113

About DeciBio 114

Key NGS Trends 101

Trends by Customer Type 102

Trends by Product Type 103

Trends by Application 104

Trends by Therapeutic Area 105

Trends by Geography 106

Trends by Competitors 107

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5th edition: What’s new?*

Updated Content Key Changes to Market Numbers*

Updated Market Trends

Note: * Selected significant changes only; additional adjustments have been made based on primary and secondary research data analysis

** For this report, we worked under the assumption that the acquisition will go through; if not, the growth prospects of PacBio would be significantly gated, with

some experts believing that the company may be in jeopardy

• Incorporated the latest trends in the NGS manufacturer

market

• Updated market numbers in light of:

o Fast market growth in 2017 and 2018, but more limited

growth in 2019, as reflected on Illumina’s recent results

o Shift in Roche’s expected instrument launch timeline

(ending its agreement with PacBio)

o Progress and adoption for select competitors (e.g.,

Oxford Nanopore, MGI)

o Increased visibility in adoption of novel products (e.g.,

NovaSeq, GridION X5)

• Reassessed market trends for each of the market

segments analyzed, including:

o Customer types (expanded to 11)

o Product and platform types

o Applications and therapeutic areas

o Geographies

• Reevaluated the potential of high-growth applications

o Research applications (e.g., population genomics, single

cell genomics, microbiome research)

o Liquid biopsies (from early detection to monitoring)

• Updated market numbers based on secondary research

and latest trends up to Q2 2019

• Validated and refined our projections of growth rates for key

players, such as:

o Illumina: Market share loss, given increased competitive

intensity (and entrant starting from a low revenue base),

some saturation from high throughput customers, and

exposure to low growth research markets

o Thermo Fisher: Instrument share loss, given expected

competition in clinical decentralized settings, and in light of

the availability of AmpliSeq on Illumina instruments

o Oxford Nanopore (ONT): Excellent recent progress, turning

the corner in Oct. 2016 with the launch of its 9.4 chemistry,

and gaining traction across its product line

o PacBio: Eventful couple of years, but assuming return to

growth following an Illumina acquisition**

• Conducted a new forecast to 2022, taking into

consideration recent and future instrument launches

• Adjusted market size and growth for some markets

o RNA-Seq: Increased growth rate given the rapid adoption of

single cell RNA-Seq

o Therapeutic Area: Increased the relative spend from

oncology (vs. other TAs) customers, given the fast adoption

of liquid biopsy

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This report assesses the WW market size, growth and trends of manufacturer

NGS market; it includes and excludes the following solutions

• DNA sample preparation instruments and solutions not

offered by sequencer manufacturers listed to the left

o Single cell prep offerings (e.g., 10X Genomics, Mission Bio)

• DNA fragmentation technologies

o Mechanical shearing (e.g., NGS BioRuptor, Covaris)

o Enzymatic fragmentation (e.g., fragmentase, transposase)

o Chemical fragmentation methods

• DNA mapping technologies

o Various scaffolding technologies (e.g., OpGen,

BioNanogenomics, Nabsys)

• Third party automation or bioinformatics support*

o Liquid handling instrument sales (e.g., Perkin Elmer’s NGS

Express Workstation)

o Hardware (e.g., BioTeam) or Software (e.g., Edico

Genomics) from third party companies

• Sequencing Services

o Clinical service providers (e.g., Sequenom, Illumina Verinata)

o Sequencing Service providers (e.g., Sales from core

facilities)

Note: * Or other forms of third party sales (e.g., companies offering bundled service contracts for multiple lab instrumentation, including NGS)

Source: DeciBio Analysis

Report Scope

• Sequencing instruments from established and emerging

manufacturers, including:

o Illumina

o Thermo Fisher (SOLiD, Ion Torrent)

o Pacific Biosciences

o Roche (454 Life Sciences, Genia)

o MGI

o Oxford Nanopore

o QIAGEN (Intelligent Biosystems)

o Genapsys

• Sequencing reagents and consumables from players listed

above and third party providers (e.g., NEB, ArcherDx)

• Sequencing instrument contract services & software

o Service contract offered by manufacturers to repair the

insured platforms

o Software shipped with the instrument

Technologies and Revenues Included Technologies and Revenues Excluded

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Market sizes for each of the top NGS players are reported as instrument or

reagent revenues; Services are excluded from our analysis

Note: * Software typically used for primary analysis (e.g., analysis of raw data coming out of the instrument)

** COGS: Costs of goods sold (which sometimes includes personnel)

Source: DeciBio Analysis

Instruments(Instruments, Service

Contract and Software)

• Instruments include systems used for sample preparation or analysis, and that typically require

a source of energy (e.g., 110V / 220V, battery)

o Example instruments include Illumina’s HiSeq, Ion Torrent’s PGM, PacBio Sequel II, ONT’s MinION

• Many users purchase a service contract (or annual maintenance agreement) to “insure” the

instrument and guarantee timely repair when necessary

o Service contracts typically vary from 10-15% of instrument purchase price (per year)

• Instrument Control and Sequencing Primary Analysis Software* that run the instruments

analyzed in this report

o More advanced hardware (e.g., BioTeam) and software (e.g., DNAnexus) and third part software

are not included in this analysis

Reagents

Product Types

• Reagents and kits are products that are used (in combination or not with an instrument) in

order to analyze a sample

o Example reagents include library preparation kits

Services

(excluded)

• Services are experiments conducted for a lab by a life science research tools manufacturer

(not another laboratory, core facility or CRO)

o Example services include sequencing services from Human Longevity, Foundation Medicine,

Tempus, Guardant Health, university core facilities

o Note: COGS** from service providers are essentially captured by manufacturers included in this report

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In this report, we expanded the number of customer types to eleven

Note: * For example, the UK is launching a 500K genome (UK biobank samples) project funded by the government, charities and four biopharma companies

** Applied markets include AgBio, human identification (HID) / forensics, animal health, environmental health, food safety, biosecurity

Source: DeciBio Analysis

Definition Example institutions / logos

Academic Basic

Research

• Non-profit institutions / centers focusing on basic or translational

research, primarily funded by governmental grants (e.g., NIH)

Population Studies• Large initiatives to sequence 10K to 1M patients, typically using

WGS or WES; diverse funding sources exist*

Biopharma R&D• For-profit organizations developing medicines

o This segment tracks preclinical R&D (non-clinical trials)

Biopharma Clinical

Trials

• For-profit organizations developing medicines

o This segment tracks Phase I-III clinical trials (excl. liquid bio)

Liquid Biopsy Clinical

Trials

• Non-profit and for-profit organizations, typically Dx companies,

running clinical trials to launch liquid biopsy tests

Clinical Diagnostics

(Oncology)• Clinical institutions including large and specialized reference

laboratories and hospitals running samples to inform patient

treatment and management

o Oncology (e.g., lung cancer, leukemia)

o NIPT (non-invasive prenatal testing)

o All others (e.g., rare diseases, neurology, cardiology,

preimplantation genetic disease / screening)

Clinical Diagnostics

(NIPT)

Clinical Diagnostics

(All others)

Liquid Biopsy (Dx)• Commercial companies running liquid biopsy tests for applications

such as early cancer detection, or Tx selection / monitoring

Applied Markets• For-profit or government funded institutions and laboratories

running tests in production mode**

Industry• For-profit organization typically offering genomics products to life

science and diagnostics customers

Customer Types

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We used a combination of primary and secondary research to compile data

presented in this report

Note: * Overall: 17 interviews in the U.S., 10 in Europe and 5 in the rest of the world

** Discussions started with an assessment of the current and future funding environment

*** Not an exhaustive list; **** Review of blog entries from Dale Yuzuki, James Hadfield, and Keith Robison

Source: DeciBio Analysis

We built a bottom-up market model by competitor; growth rates obtained from interviewee feedback and

secondary research were triangulated with the reality reflecting the current funding environment**

Data and analysis

Primary research Secondary research***

• Interviews with 32 experts*

o 5 academic professors and post-doctoral fellows

from leading institutions worldwide

o 6 lab directors and senior scientists in large Pharma

& small biotechs

o 4 lab directors and scientists in applied markets

o 6 clinical lab directors

o 11 life science business experts / professionals

• Typical interview structure

o Funding

o Current activity

o Key players and technologies

o Trends

o Future activity

• Company financial information

o 10-K / 10-Q and associated earnings call transcripts

o Company presentations

o Press releases

• Company technical information

o Company website

o Company publications and posters

o Company technical sheets

• Other sources

o PubMed Central

o Peer-reviewed publications and scientific posters

o Government reports and databases (e.g., NIH reporter)

o Conferences (e.g., AACR, ASHG)

o Industry observer blog entries****

Key Report Sources

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This report is based on rigorous model tracking of expected sales by key

companies and platforms*

Note: * Revenue by platform is DeciBio proprietary information not available in this report. Contact [email protected] for more information

** Numbers shown for demonstration purposes (not real NGS platform data)

*** A simplified version (by company) was used for competitors other than Illumina, Thermo Fisher, Pacific Biosciences, and Roche

Source: DeciBio Analysis

Instrument

Revenues

by Company

Platform

Reagent

Revenues

by Company

Platform

+

=

Total

Revenues

Instrument Revenues Unit Type Year 1 Year 2

Instrument Installed Base

New instrument placement # input 90

Instrument upgrade / trade-in # input 10

Instrument decommission # input 20

Instrument installed base # calc 220 300

Instrument Price

Price per instrument $K input $500

Price per upgrade $K input $100

Price per service contract $K input $60

Instrument Revenues

New instrument revenues $M calc $45

Instrument upgrade revenues $M calc $1

Service contract revenues $M calc $13

Total instrument revenues $M calc $59

Reagent Revenues

Reagent pull-through (new) $M input $200

Reagent pull-through (1+ year) $M calc $350

Total Reagent Revenues $M calc $86

Total Revenues

Total instrument revenues $M feed $59

Total reagent revenues $M feed $86

Total product revenues $M calc $145

Not on

year 1

Linear instrument placement

during the year

Model Approach**

Trade-in

example

• This analysis offers immediate yearly market estimates by:

o Competitor: For example, Illumina or Pacific Biosciences

o Product Type: Instruments vs. reagents

o Platform Type: Workhorse vs. desktop

• This bottoms up analysis is then used to conduct a top down

segmentation as followed***:

o Customer type: Estimated the yearly split for each platform

(e.g., Academic 2019 relative revenues for MiSeq)

o Application: Estimated the yearly split for each platform and

customer type (e.g., RNA-Seq relative revenues for HiSeq

from Academic customers in 2015)

o Geography: Estimated the yearly split for each platform

(done at the company level for some players (e.g., MGI***)

o Therapeutic Area: Estimated the yearly split by customer

type (e.g., oncology split for biopharma customers in 2021)

• These analysis were based on a mix of:

o Platform information and specifications

o Interviewee feedback

o Peer-reviewed publications

o Manufacturer and other websites

o DeciBio expertise

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This model highlights how a single platform may generate overall revenue

growth rates of 11% at year 7, as instrument revenues decline in the mid-single

digits at a steady state of 300 instruments sold per year

Note: * Assumptions (2016-2022): Yearly instrument placement: 50, 100, 150, 200, 250, 300, 300; Installed base: 50, 150, 300, 485, 673, 815, 863 (given

some decommission and instrument replacement); Instrument price: $100K (static); Instrument service contract: $10K (static); Percent instrument under

service contract: 90% (static); Reagent pull-through: $50K (static, with 50% at year 1)

Source: DeciBio Analysis

Illustrative NGS Platform*

50

150

300

485

673

815863

-500

-250

0

250

500

0

100

200

300

400

500

600

700

800

900

1,000

2016 2017 2018 2019 2020 2021 2022

Installed Base Instrument Decommission

Instrument Purchase

Installed Base Instrument Purchase / Decommission

2016 2017 2018 2019 2020 2021 2022

Installed Growth - 200% 100% 62% 39% 21% 6%

Purchase Growth - 100% 50% 33% 25% 20% 0%

Decom. Growth - - - - 317% 152% 60%

2016 2017 2018 2019 2020 2021 2022

Instrument Growth - 109% 56% 39% 29% 23% 4%

Reagent Growth - 500% 150% 86% 55% 35% 18%

Overall Growth - 152% 81% 56% 41% 29% 11%

$5 $10

$16 $23

$29 $36 $37

$4

$9

$17

$27

$36 $43

$-

$20

$40

$60

$80

$100

2016 2017 2018 2019 2020 2021 2022

Instruments Reagents

Total Revenues