JPMorgan Healthcare Conference Notes #4: Next Gen Sequencing (NGS)

Seminar: Harnessing the Power of Next Gen Sequencing: The View from Industry 1/12/15

A panel of leading entrepreneurial R&D executives presented their outlook and issues on the future of Next Gen Sequencing (NGS), focusing on drug development and future clinical diagnostic applications. The panel was Randy Scott Ph.D. Founder and CEO of Invitae, George Yancopoulos M.D., Ph.D. CSO of Regeneron and John Stuelpnagel DVM, Co-Founder and Chairman of 10X Genomics. Adaptive Biotechnologies CEO Chad Robins was scheduled to participate but could not due to Adaptive’s recent acquisition of Sequenta for a broader technology base to accelerate their efforts in cancer immunosequencing to measure the immune response to solid tumors.

Background

Invitae recently filed an S-1 and Prospectus for a Public Stock offering of up to $86M with J.P.Morgan Securities as the sole book-running manager with Cowen and Company and Leerink Partners as co-managers. Invitae’s Mission is to bring comprehensive genetic information into mainstream medical practice with a focus on hereditary cancers.They perform full-gene sequencing and deletion/duplication analysis in their CLIA Lab based in San Francisco, CA.

NGS is evolving to the clinical stage which is much more complex due to the need for high definition sequencing, computing power, expense and time of long read length sequencing, and regulatory issues such as Lab Developed Tests (LDTs). The market is currently dominated by Illumina, Inc. (ILMN) with Life Tech Technologies, now Thermo Fisher (TMO), in the number two position. Pacific Biosciences of California (PACB) holds a growing niche position in microbiology and agriculture with revenues in the $60M range. At least 3  major private NGS players are being funded to advance the field.

Sequencing technologies and the potential clinical applications are beyond the scope of these developments so to follow the NGS  field more closely including product developments I would recommend following news on genomeweb.

Panel of Industry Leaders

Here are some of the key issues and takeaways from the panel:

  • Genetics will increasingly be the driver of drug development and NGS is important to the process with more rational design of therapeutics.
  • There are already more than 4000 diseases and disorders tied to genes. See www.genetests.org.
  • Regeneron and Geisinger Health System announced a Major Human Genetics Research Collaboration focused on studying the genetic determinants of disease. Direct linkage of gene to disease is actually very rare. This collaboration will help link the phenotype (symptoms and disease) to the genotype to determine long term health outcomes. Phenotype linkage will be the real breakthrough.
  • “Long read” sequences of DNA are needed to advance certain applications of NGS.  10X Genomics has microfluidics, bioinformatics and chemistry technology which purports to complement and “upgrade short read ” sequencers and is already working non-invasive pre-natal tests for chromosomal abnormalities.
  • Prenatal tests are already available from Sequenom Laboratories, such as the Trisomy test for chromosomal abnormalities.
  • Genomic Health (GHDX) was mentioned as a potential NGS advance with their “liquid biopsy” for detecting mutational changes at the somatic level e.g, tumor DNA in urine and blood.
  • Some commoditization of NGS testing will occur because of recent Supreme Court ruling that human genes (DNA) in its natural form cannot be patented. However applications and methods will have IP.
  • Many NGS tests will be commercialized over the long term with prices as low as $100 but accuracy and information content will be critical.
  • The market will develop rapidly over the next 2-3 years toward medical applications driven by consumer demand and lower costs per genetic test. Payors are behind the curve. Genetic testing and NGS should be settled in the marketplace not through the FDA process because regulation could stifle innovation. The FDA will lag NGS technology developments.

We have written about several genomics companies in previous posts and all are included in the Rayno Diagnostics and  Tools Portfolio: Foundation Medicine, Inc.(FMI), Genomic Health Inc. (GHDX), Illumina,Inc. (ILMN), Pacific Biosciences of California, Inc. (PACB), and Sequenom (SQNM).

Updates this week.

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