The European market for next-generation sequencing (NGS) informatics is set to more than double by 2021, driven by the data deluge resulting from falling sequencing costs, electronic health records, and wider use of data in clinical interpretation, according to a new report by Frost & Sullivan.
“Growth Opportunities in the European Next-generation Sequencing Informatics Market, Forecast to 2021” projects the that the market for European NGS informatics will balloon from $236.6 million in 2016 to $508.6 million by 2021.
Frost identified four trends as supporting development of that market:
- Initiatives by the European Union and individual countries to promote personalized medicine;
- Large-scale national genomics data efforts such as the U.K.’s 100,000 Genomes Project and France’s French Plan for Genomic Medicine 2025;
- Growth of NGS informatics-based services, and R&D, in Europe’s Benelux and Nordic regions;
- Growth of NGS infrastructure by Wellcome Trust Sanger Institute and other institutions, along with a growing workforce and increased government support.
However, three challenges remain toward the growth of the European NGS informatics market over the next five years, Neelotpal Goswami, senior industry analyst, transformational health with Frost & Sullivan, told Clinical OMICs.
“Europe presents a fragmented market with low patient volumes per country,” resulting in varying revenues country by country, Goswami said. “The region has diverse regulatory and reimbursement rules across nations. Also, as the market is still maturing, customer requirements and market solutions are still not standardized. This acts as an impediment for a modular approach to NGS solutions.”
NGS informatics companies must move toward offering end-to-end services through solutions that need to be customized for biopharma and diagnostics firms, Frost & Sullivan concluded.
As providers expand those services, the report added, they are more likely to enter collaborations—or pursue M&A by acquiring companies or being acquired by larger players. Frost & Sullivan identified nine such companies ranging from giants such as Illumina and QIAGEN, to up-and-coming companies such as BC Platforms, Bluebee, Congenica, Eagle Genomics, GENALICE, Genestack, and Sophia Genetics.
“NGS is a comparatively recent technology with significant applications still in the development stage. The commercial success of its application across biopharma and diagnostics is still being assessed,” Goswami said.
Goswami identified three unmet service needs that NGS companies will be looking to address. First, analytical pipelines offered by NGS vendors are often limited in matching the clinical development needs of pharma and biotech companies. The databases available with vendors for analysis and interpretation are still being developed and/or upgraded to match the needs of pharma and biotech companies.
Additionally, features such as dashboards and analysis models have yet to be standardized across vendors. As a result, Goswami added, the research teams of biopharmas are struggling to migrate from an internal/do-it-yourself (DIY) platform to an external NGS interpretation vendor.
With primary and secondary analyses moving toward automation, Frost & Sullivan observed, market growth for NGS informatics will be propelled by tertiary analysis or interpretation.
How much additional analysis and storage companies are likely to seek, Goswami said, will depend on the specific needs of of the market: “We expect tertiary analysis to be the key market driver with basic secondary analysis likely to move to the commoditized space.”
Frost & Sullivan says five areas are likely to account for the growth of tertiary analysis in coming years: Precision medicine, growth in end-to-end services, big data, growing use of multiple omics technologies or “multi-omics” to shows how genetic and non-genetic factors interact, and novel end users.
“New NGS application areas such animal and plant-biotechnology, consumer products, food and beverages, etc. are growing,” Goswami said. “Vendors will need to develop specific solutions vis-à-vis a generalist approach to cater to diverse yet precise needs.”