In 2020, when the world was grappling with the onset of the COVID-19 pandemic, next-generation sequencing (NGS) companies became instrumental in developing comprehensive testing and research strategies to fight the virus. Some sequencing companies have expanded their offerings to include COVID-19 testing kits, vaccines, therapeutics, and other related products. Notably, Illumina, a global leader in the NGS market, reported a 40% revenue increase in 2021 as a direct result of COVID-related demands. Illumina acquired (allegedly bypassing certain regulatory hurdles) GRAIL, a company that develops blood tests for early multicancer detection, and partnered with Helix, a company that provides COVID-19 testing and genomic surveillance. However, as the world slowly transitions into a post-pandemic phase, maintaining this level of revenue growth is a challenge that these companies must now address. With the pandemic-induced boost waning, the emphasis for NGS companies is shifting back to non-COVID sectors, and the decline of COVID-related business represents a severe test to their balance sheets.
Genomic medicine is a primary focus area for NGS companies. Illumina launched its TruSight Oncology 500 test in Europe, aiming to transform cancer care through genomics. Governments worldwide are supporting such initiatives, with the US government continuing to fund the long-term Precision Medicine Initiative and increasing the National Cancer Institute’s budget to over $7 billion in 2023. Recently, Breast Cancer Canada partnered with Illumina and AstraZeneca to award grants to Canadian research teams to advance screening and detection of breast cancer using precision medicine technologies, including artificial intelligence (AI) and machine learning (ML).
Agri-genomics is another avenue gaining interest from sequencing companies. BGI Genomics, for example, is leading the charge, contributing to improving crop yields and livestock health. BGI-Research part of the BGI group forged a collaboration with Dutch based agri-food research company KeyGene to apply BGI-Research’s spatial enhanced resolution omics-sequencing (stereo-seq) for plant breeding. The European Union increased its investment in 2023 to €13.5 billion towards the Horizon Europe program to drive innovation in agriculture.
To diversify their market presence, sequencing companies are collaborating with various entities. Illumina’s 2023 collaboration with Bristol Myers Squibb aims at advancing diagnostics for cancer immunotherapy. Similarly, its partnership with Genmab, announced in 2022, is directed towards developing antibody therapeutics.
Sequencing companies are also making inroads into emerging economies, which are projected to account for 24% of global healthcare expenditures by 2025. A case in point is India, where the government’s “Make in India” initiative aims to turn the country into a global biotechnology hub, creating an inviting environment for sequencing companies.
In the booming AI health market, sequencing companies are integrating AI and ML to interpret large volumes of data. Deep Genomics, founded in 2015, has been harnessing AI to identify disease patterns from genetic sequences, creating additional revenue. Earlier this year, the White House Office of Science and Technology Policy laid out priorities to advance AI-driven drug manufacturing and design. The policy aims to develop a national network of biomanufacturing resources, including autonomous laboratories and a cloud-based virtual research organization to connect the labs.
Innovation continues to be at the forefront for sequencing companies. Pacific Biosciences, in January 2023, launched its Sequel IIe System, which reduces the need for upfront data processing and makes NGS more cost-effective. Illumina almost doubled their R&D expense in 2023 to support business growth and continue expansion in research and product development efforts.
While the post-pandemic era poses challenges for genome sequencing companies, it also provides them with a unique opportunity to refine their growth strategies and diversify revenue streams. The market for sequencing is assessed in the SDi Global Assessment Report 2023. The report examines the sequencing market as well as the market for over 80 other types of analytical lab instrumentation in order to provide information on the market size, vendor share, and forecasts by product type, region, end market and application.