'"We've gone faster than anybody thought we could," says Illumina Chief Jay Flatley. He says he'll continue to dominate the competition.
Have we mentioned the ifs? Like all potentially disruptive innovations, gene sequencers could fizzle. Their success depends on unpredictable events: how fast the technology improves, how quickly researchers can make medical discoveries based on the new machines and--most critically--whether drugs can be developed to treat diseases. Gene test prices could drop, becoming a low-margin commodity like medical blood tests (cholesterol, blood sugar and so on), which, at a few bucks a pop, are a $40 billion business. Ultimately Rothberg's machine may not win. Like the Commodore 64 home computer that dominated in the 1980s and disappeared soon after, the PGM could be quickly eclipsed.
Rothberg faces three formidable hurdles. First, the market for sequencing is dominated by Illumina of San Diego, whose big machines have helped make most of the major discoveries so far--and competing won't be easy. Next, a novel (and faster) approach could leapfrog the Ion Torrent device. Finally, sequencing could ultimately be a bust if it proves tough to find genes linked to disease, or improved cancer diagnoses and hoped-for improvements in manufacturing drugs.
At least a dozen venture-backed companies are competing for the title. Pacific Biosciences in Menlo Park, Calif. raised $200 million in an October initial offering on top of $370 million of venture funding. Its machine is due in early 2011 and will be the first to scan a single DNA molecule. Nearby, in Mountain View, Complete Genomics (whose November IPO raised $90 million) is betting that DNA scanning will become a service industry like pathology where everything is sent to giant centralized labs.
Like early PCs, Rothberg's gizmo has limitations. It won't compete immediately with the monster machines from Illumina because it can decode only a tiny fraction of the human genome at a time. The first version of the PGM can read a modest 20 genes at once. This may be enough for many smaller jobs, as when a doctor wants to test a tumor for a small number of disease-causing genes and whether a certain drug is likely to work on a particular tumor, or if an infectious-disease researcher wants to verify which strain of microbe is present in a saliva sample or water source.
Illumina Chief Executive Jay Flatley claims the PGM poses no threat. "We've gone faster than anybody thought we could," he says. Indeed, his machines can crunch a thousand times as much data as the PGM. "That has relegated everybody else to niche markets." More proof: Illumina's shares are up 700% over five years. His team is working on many next-generation technologies that could render Ion Torrent obsolete, including one that will read a single DNA molecule. That's huge. Right now detection isn't able to do this and instead requires thousands of copies of molecules to be made.
But Rothberg's secret sauce is rapid scalability. Because his gene machine is the first DNA decoder to rely on silicon transistors, it should improve performance very quickly; he says an upgrade, due out in the first half of 2011, will be ten times as powerful as the original. He explains he is building on the $1 trillion already spent on microchip R&D and manufacturing. "Once you move to a semiconductor device, obviously taking advantage of Moore's Law"--that you can double the number of transistors on a chip every 18 months-- "things get cheaper and they become ubiquitous," he says.
He vows to have a machine by 2012 that will decode in two hours all 20,000 human genes that code for proteins. (This is roughly 3% of all DNA and will still be far behind Illumina, which can do all the DNA twice.) Eventually, he hopes to create a machine the size of an iPad. "There isn't a technology that we will not pass in a very short period of time," he says. "It doesn't matter how far ahead they are."
posted on January 08, 2011