Neil Hall is Responsible for Rising NGS Prices

“Wait, what?! Neil Hall is responsible for NGS prices actually inching up rather than continuing down to ever lower depths?”

No, not really.

Well, he kind of is. And most likely so is everyone reading this blog. (All three of you.)

It’s because DNA sequencing consumers didn’t ramp up their usage as quickly as Illumina was driving down the prices. When Illumina bumped HiSeq capacity from 300Gb per run to 600Gb per run, their customers said:

“Yay! The same amount of sequencing for half the price.”

To which Illumina responded:

 “What? No, no, no, no! You’re supposed to sequence twice as much. Actually, you’re supposed to sequence even more because the cost is so low that new applications are now feasible”.

And the stock market said:

“Hmm, I’ll have half that market cap back, thank you.”

So Illumina learned their lesson and decided to be more careful about releasing upgrades for the HiSeq. Right around the time they launched the 600Gb system, they said they were able to generate runs of over 1Tb in house. It’s been around two years since then, but still no update.

Why not? Because there isn’t any market pressure to do so. The only competition HiSeq had was SOLiD, but that platform has essentially been abandoned by Life Technologies as a commercial failure. (You can love SOLiD reads all you like, but even with a much bigger marketing and sales budget, it was still getting trounced by HiSeq. Too bad they didn’t release Wildfire a couple of years earlier – we might not be having this conversation right now.)

And while Illumina was busy dominating the high throughput NGS market, Ion Torrent came out and tried to carve out a different niche: much faster, much cheaper machines (albeit with lower throughput). And that niche has really taken off (especially in the clinical space). Illumina responded with their own machine (the MiSeq) and since this is the only space where they’re facing serious competition, it’s where they are concentrating most of their resources. This means we’re now getting much faster reads, but they aren’t really getting any cheaper.

So is the party over for cheaper reads? Since the ‘plateau’ was caused by market forces and not technological advancements, the answer is almost certainly “no”. Researchers will figure out ways to creatively use ever more sequencing capacity, and when they start bumping into the limits of what the current machines can do, those machines will almost certainly improve. And the competition could come back. Ion Torrent has stumbled on their original road map, but if they ever release the PIII chip, that could put pressure on the HiSeq. And while Oxford Nanopore is the latest to suffer from the hype-hate cycle, there are a lot more companies waiting in the wings to dethrone Illumina. Check out BlueSEQ’s ‘Emerging Technologies’ section of the NGS Knowledge Bank for a partial list.

Dr. Hall is right that the field would benefit from genome scientists focusing on “new ideas”.  He’s also right that the cost of sequencing will plateau. But I don’t think we’re quite there yet. And where it plateaus, whether that’s $1000, $100 or $10, will make a big difference. 

Edit: Gah! I totally forgot to include a link to Mick Watson's excellent take on the cost of sequencing.

Explaining BlueSEQ

This is my (non-snarky) attempt to convince Anthony Fejes that BlueSEQ might be a good idea.

Anthony Fejes, in the process of doing a phenomenal job with realtime blogging about the Copenhagenomics talks, expressed his concerns and doubts about BlueSEQ's business plan. For those of you who don't know, BlueSEQ is a Danish startup which is attempting to create a neutral next generation sequencing exchange. Their goal is to match researchers who have a sequencing project need with service providers who have excess capacity on their sequencers.

Take a minute to read Anthony's comments (but please come back when you're done).


His main concerns seem to be:
1) Why would service providers want to participate?
2) How can BlueSEQ standardize NGS in a meaningful way?

Let's tackle the first point. Why would providers want to be a part of this? I'll give you my opinions, but the simple fact is they ARE interested. BlueSEQ has already signed up over 20 providers and they're getting more requests all the time. Providers really want to have access to these customers to help them drive and expand their business. It also helps them optimize their workflow. For example, if they're in the middle of a large human genome resequencing project and they've got an internal user who wants to run a 5 sample small RNA-Seq experiment, they could outsource the small project so as to not interrupt the large project (which would require a completely different setup). Alternatively, if they're running some ChIP-Seq projects, they may want to go onto the exchange to find as many ChIP-Seq samples to help fill up an entire 5500xl SOLiD or HiSeq 2000 run. Basically, it gives them more customers and more flexibility.

Now to the second point. Anthony correctly points out the folly of trying to standardize such things as the bioinformatics analysis process. Fortunately that's not what BlueSEQ is trying to do. In talking with dozens of service providers, what they've found is that a big issue that the providers face is educating their potential customers about what NGS can and can't do and translating the customer's general idea of a biological experiment into a particular NGS protocol. This is where BlueSEQ can step in. The goal is to help guide researchers in communicating their needs to the providers. For example, translating something like "I want to compare gene expression levels between these 10 samples" into something like "Starting from 100ng of total RNA, I need to run RNA-Seq (including library prep) on 10 mouse samples with 50M 1x100bp reads per sample, followed up with an analysis that looks for both expression level differences as well as SNP variances". The final details would likely be worked out between the researcher and the provider, but they would at least be on the same page.

If you're still with me, here are my quick responses to the rest of Anthony's specific questions:

[This is one stop shopping for next-gen sequencing providers? How do you make money doing this?]
BlueSEQ makes money by charging service provider small fee (generally 5-10%, depending on the project size) when, and only when, the provider wins a bid.

[How do you standardize the bioinformatics? Seems... naive.]
Yes, that would be naive, but they're not trying to do that.

[again, why would providers want to opt in to this?]
Because they want more business. Of course, if a service provider is running their machines 24x7, they wouldn't want to join. However, it appears that most providers don't find themselves in this situation.

[Why would any provider want customer reviews of NGS data... ]
It's possible they wouldn't, especially if they're not very good. But this is really more for the users as over time it will help them pick the best providers (and not, for example, choose simply based on price).

[the sample prep is a huge part of the quality, and if they don't control it, it's just going to be disaster.]
This would be entirely up to the researcher and provider. Some providers want that level of control (to ensure high quality) while others are happy to have their customers prepare the libraries.

Retirement Fail...

Well, I find myself a little less retired than I expected to be. My intention was to take a good long break before looking for something interesting. It seems, however, that something interesting has found me. I'm doing some work for a Danish startup called BlueSEQ.

They're setting up a sequencing service exchange. If you've got a sequencing project but no sequencer (or not enough capacity) you can put your project on the exchange and compare the various bids (to get the best price, right platform for the job, level of expertise you need, etc.) If you're a service provider or core lab with excess sequencing capacity you can bid for projects to keep your pipeline full. The service is free for researchers while the service providers pay a small service fee (but only for successful bids).

The best part is that the whole process is centered around the Project Design Tool. It takes researchers step by step through the process of describing their experimental needs, ensuring that both the researcher and the service provider are on the same page and everybody is getting exactly what they expected. The project designs can be saved and reused for future projects to maintain consistency.

So where do I come in? I'm developing the BlueSEQ NGS Knowledge Bank, a neutral repository of all things next gen sequencing. I've got the basics up now with general descriptions of the major platforms and applications as well as a list of NGS-focused conferences and meetings. Have a look and tell me what you think. I'd love to hear your thoughts about what's there now and what you'd like to see in the future.

Check out the official press release from BlueSEQ.