EC The Brave New Genomic World

The past decades brought us the foundational work that will enable significant advancements during the next decade in genomics. Part of the merit goes to Illumina (ILMN) that pushed the sequencing costs down during the last decade. The short-read technology was the paradigm over which many companies developed new technology and researchers made scientific breakthroughs.

(Photo credit: National Human Genome)

Now, the tide is turning again. Pacific Biosciences (PACB) developed one of the first commercially available long-read sequencers. The HiFi allows whole-genome sequencing, which is an upgrade because it offers superior accuracy and better variant detection. Right now, the costs are still higher, but there is lots of room for improvement. The costs should keep decreasing at a roughly constant rate over time.

Artificial Intelligence should offer a helping hand to genome sequencing. For instance, HiFi integrates Google’s (GOOGL) (GOOG) AI to correct inconsistencies in the data and improve accuracy. Other companies worth mentioning are 10x Genomics (TXG) and Bionano Genomics (BNGO).

Spillover effects

Sequencers are mainly used by organizations that need genome sequencing data to perform their activities. We are referring to researchers, diagnostics companies, and pharmaceuticals. The fact that the costs are dropping while the information is getting richer, means that more and more organizations can join this field.

For instance, Invitae (NVTA), a diagnostics company, has reached an agreement to buy a production-scale high-throughput sequencing platform based on HiFi’s technology. Invitae is pursuing this path because it wants to offer full genome information to its patients. Further drops in cost will attract more companies interested in providing new genomic-based services and products.

Cancer screening is another area that will gain from richer information and lower costs. Companies like Exact Sciences (EXAS) that are pursuing liquid biopsies that can detect multiple early-stage cancers will benefit from more information that allows them to find more biomarkers. It goes without saying that lower costs will be critical to convince third-party payers to adopt this innovation.

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Disclosure: Disclosure: I am/we are long ARCT, CRSP, EDIT, EXAS, GOOG, GOOGL, NVTA, PACB, RPTX, SRNE. I wrote this article myself, and it expresses my own opinions. I am not receiving ...

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