Genomic Shift

Model organisms don't capture the same sense of scientific challenge that sequencing the largely completed human genome did. A genomic shift has occurred. One benchmark for that change is the sudden shrinkage of several sequencing markets related to the human genome, including instrumentation, raw data, and personnel.

Now that the rough map of the human genome is completed, both industry and academia are turning to sequencing the genomes of medically relevant animals and microorganisms. But these model organisms don't capture the same sense of scientific challenge that sequencing the human genome did. Moreover, the pharmaceutical industry, already awash in drug targets identified using genomics tools, is fixated on development, not new target discovery, and is consequently investing in analytical drug development technologies, not upstream tools. A genomic shift has occurred. One benchmark for that change is the sudden shrinkage of several sequencing markets related to the human genome, including instrumentation, raw data, and personnel.

Applied Biosystems Group (ABI), a division of Applera Corp. and the leading seller of sequencing systems, surprised analysts when it announced in January that sales of its ABI Prism 3700, the workhorse for high-throughput sequencing, had dropped 80% in the December 2001 quarter. (See "Out of Sequence," IN VIVO, February 2002.) With the completion of the Human Genome Project, ABI's sales to the large public genome labs and to sister company Celera Genomics Group , formed four years ago in anticipation of its being a major purchaser of ABI's 3700s—and in part to prime the market for that product — fell off sharply. Neither Celera nor the large publicly funded genome centers need more sequencers. Genomics companies themselves appear to have adequate sequencing capacities to cover their immediate needs.

Sequencing reagent sales are likewise showing a downward trend, but they've declined for different reasons: not because labs are sequencing less, but because they are learning how to do it more efficiently using smaller sample sizes. ABI's reagent sales to Celera and the five biggest genome centers decreased by 62% to $12 million, from $32 million in the same quarter in 2000. Sales to Celera alone dropped $8 million during that period.

Sales of sequencing systems and consumables, which affect only a few companies, don't necessarily reflect how much sequencing researchers are actually doing. But major companies appear to be moving out of what once promised to be the biggest commercial opportunity for the process. Witness the recent strategic shifts at Celera and Incyte Genomics Inc. , away from the genomics information business in favor of drug discovery. Biological pathway information is more commercially relevant to pharma and biotech companies than sequencing information. Those firms need tools for validating drug targets, not finding them—tools that the Celeras and the Incytes of the world offer, but which are also available elsewhere, either through partnering or purchase. In addition, technologies for protein studies now have a faster growth rate than sequencing.

Another indicator of the shift in sequencing priorities is employment. Says Keith Dionne, PhD, VP and general manager of Millennium Pharmaceuticals Inc. 's technology business: "We have people who have been doing sequencing for 10 years now. They have either picked up significant skills outside of that area or they are very well trained in a field that does not need more people right now." For PhDs, sequencing experience is now more of a springboard to other opportunities than it is a sought-after skill set, adds Bruce Roe, director of the Advanced Center for Genome Technology in Oklahoma. In his laboratory, students acquire additional skills in computer science to help them make sense of their data. They no longer focus on learning how to optimize sequencing reactions.

Not surprisingly, the focus among academics has changed, too, as public support for sequencing peters out and the labs shift from sequencing per se toward genome analysis. Funds allocated to the public centers for the Human Genome Project will run out in April 2003, by the time the full sequence is completed. Complementary funding to finish the sequencing is available from the NIH whose total budget is forecasted to increase by 15%. Yet the budget of the Human Genome Research Institute has only increased by 8% between 2002 and 2003 against 12% between 2001 and 2002.