Genetic Future

David Ewing Duncan has a piece in Portfolio.com about Complete Genomics, a DNA sequencing company that launched back in October promising to offer whole-genome sequencing for $5000 by mid-2009.

Complete Genomics is based on some allegedly powerful new technology (here’s a cartoon summary) developed in-house – I say “allegedly” because the company is yet to release any real data to demonstrate the capacity of its platform. New sequencing platforms are a dime a dozen nowadays, but the novelty of the Complete business strategy is this: instead of selling instruments to sequencing facilities, it will be establishing its own large-scale sequencing centres and then providing sequencing (including the tricky informatic processing, but not functional interpretation) as a service to customers.

Likely customers include pharma companies, personal genomics providers, and the majority of genetics researchers who don’t have access to their own large-scale sequencing platforms.

It’s hard to tell exactly why Complete has decided on this service model, but I’ve heard speculation that this decision may relate to the complexity of the sample preparation or downstream analysis required for their platform – making their technology only cost-effective if performed within a large-scale, tightly integrated facility. I imagine there must be some explanation like this, as it’s hard to see why a company would want to deal with the horrors of the service industry when there’s good money to be made in the instrument business.

Either way, it will be interesting to see if the company’s profit curve stays high enough – despite the plummeting cost of sequencing – to drive its impressively aggressive expansion plans:

[Complete Genomics] is now building the world’s largest commercial human-genome-sequencing center. It expects to sequence 200 genomes per day by the end of 2010, he says. Over the next five years, the company plans to build 10 more centers with a goal of sequencing 1 million complete human genomes. “The cost will go down as we scale up,” says Reid.

That’s great press-release talk, but I’ll believe it when I see it. I’m just not convinced that the intense competition and tight profit margins in the sequencing provision industry will ever provide the revenue needed to fuel this level of expansion – but hey, I’d be happy to be proven wrong.

Anyway, Duncan’s piece is worth a read. Bear in mind, though, that Complete won’t be offering its service directly to consumers, but only through intermediaries – Duncan’s article states that boutique whole-genome sequencing provider Knome is currently “in discussions” with Complete (that’s a long conversation – it’s been going on since early October). And the $5000 price tag only covers the costs of generating raw sequence data, so you can expect the retail price to be substantially higher – detailed interpretation services don’t come cheap, but without them your genome is just a worthless string of letters.

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