Frost & Sullivan: Next-Generation Sequencing Services is one of the Fastest Growing Markets in the Life Sciences Industry

02-07-2012: The growing list of applications enabled by next-generation sequencing technology has allowed sequencing service providers to make inroads into new customer segments and research fields, such as cancer research, genetic disease research, metagenomics, newborn sequencing, and clinical sequencing. Researchers lacking in-house sequencing infrastructure or experience are gaining access to the latest technologies through service providers offering complete sequencing workflows.

New analysis from Frost & Sullivan's Strategic Analysis of the U.S. Next-Generation Sequencing Services Marketresearch finds that the market earned revenues of $160.0 million in 2011 and estimates this to reach $550.0 million in 2016.

"When new sequencing applications emerge, researchers do not always have the expertise to conduct them with in-house infrastructure, providing a significant opportunity for service providers," saidFrost & Sullivan Senior Industry Analyst Christianne Bird. "In particular, the two emerging applications of RNA-sequencing and exome sequencing are proving lucrative to service providers."

Genome centers and core facilities account for a larger percentage of the next-generation sequencing installed base than commercial service providers. Academic researchers may use core facilities for at-cost services (reagents and labor only); however, unlike commercial service providers that offer sample-to-answer services, these facilities do not always provide full bioinformatics and analysis capabilities.

While users of sequencing core facilities and non-profit genome centers must have experience with genomic data as well as in-house expertise and software to conduct analyses, customers of commercial service providers require little to no familiarity with the technology as they purchase turnkey services with comprehensive data analysis.

Nevertheless, despite researchers' eagerness to use sequencing services, the decreasing sequencing costs, influx of new competitors, and increasing adoption of sequencing in basic laboratories has placed the market in a state of flux. Commercial sequencing service providers can stay afloat in this dynamic market by differentiating themselves with value-added services.

In the next five years, next-generation sequencing is expected to gain currency in clinics for the diagnosis of rare genetic diseases, in clinical trials for patient stratification and drug response studies, and in preventative medicine of genetically related diseases. Commercial service providers must continue to adapt to emerging applications in the research, clinical and pharmaceutical fields to take advantage of growth opportunities.