Monday, July 27, 2009

Just what does a genome cost?

Scientists are rarely trained in finance, and even more rarely comfortable with it. In an ideal world, experiments just happen and somehow it all gets covered. But the reality is that experiments cost money.

Perhaps nowhere in biology has this been so at the front of attention as with genome sequencing, particularly since the cost has been marching down. But, cost has also turned out to be a murky area. Numbers are thrown around without always having clear evidence.

Today, George Church was quoted as saying the cost is around $5K and would soon be $1K. This is very exciting -- but how real is it? Not only am I nervous that this is an exon resequencing cost, but even if it's for a complete human genome shotgun I wonder how obtainable it really is? Is this cost "fully loaded" or just a raw material cost that omits facility, equipment and labor costs?

The conservative approach is to believe only a value sequencing service I can buy on the open market. Illumina has put the most prominent stake in the ground here, offering sequencing for $48K (but requiring a prescription). They're claiming getting it down to $10K by the end of the year, but until I can buy it I won't believe it.

Of course, someone could offer a $10K genome as a stunt or loss leader. If I can actually buy it, as a consumer I don't really care. But ultimately, you can't lose money on every sale and make it up in volume (alas, proven yet again in my last professional posting).

The rapid change in cost really does give headaches for people trying to relate it to other problems. For example, I feel a bit sorry for the author of a recent NAR review on SNP array technology. It's a good review & it would have a huge hole in it if it didn't address the issue of next-gen sequencing crowding out arrays, but that also leads to a problem. Next-gen clearly beats arrays on almost every measure, but a key driver of the switch is cost: the narrower the gap, the less attractive it is to settle for arrays. However, the comparisons in Table 2 were obsolete about the time the paper hit the Advance Access section. Clearly, any of the costs that are >$48K -- which is 4/6, are suspect.

It would be cool to have a daily changing price for genome sequencing -- perhaps a ticker symbol. Less flashy would be routine bidding on sequencing services on eBay. Buy it now on a genome for $5K -- now that would be real!


Kevin Davies said...

I presume George is referring to Complete Genomics, which claims its wholesale reagent costs for a human genome are about $4000, and the retail cost -- if you're a genome center or pharma client ordering in bulk -- is $5000. The CEO told me last year that they were driving down their own reagent costs to $1000.

Or he may be alluding to the Polonator, based on his own technology, which I believe is poised for a relaunch of sorts. But none of these estimates include depreciation, staff, infrastructure etc. so it is misleading.

Congrats on the new job by the way!

Sumit Middha said...

I am pretty sure its the price of transcriptome sequencing.

I don't believe the Complete Genomics is down to that cost range yet.

And yes, genome sequence is just the beginning of the story, what one needs to do with it is an entire market - 23andme, decode, etc..

George Church said...

Keith & Kevin,

Yes. I was referring to the Complete Genomics wholesale price which does already include depreciation, etc. They have delivered several genomes to customers (including PGP).

I agree that, in contrast to the above, any estimate for the Polonator would not accurately reflect depreciation etc. until someone runs a similar number of human genomes on it. The 'relaunch' (in June) was simply opening the customer base from 'tech developers' to 'anyone'.