On Illumina's Moats Past & Present

Studying how Illumina came to dominate sequencing markets is certainly worthy of at least a Harvard Business School case study, and perhaps an entire graduate thesis.  But I wanted to give a quick review of some of my thoughts on the matter, spurred by Nava Whiteford's repeated savaging of a piece in another space but also because many of these themes will show up in a flurry of pieces I'm planning (one's even nearly done!) in the next few weeks due to AGBT and some non-AGBT news.  

2024: A Look Ahead

It's January, and that means the J.P. Morgan Healthcare Conference looms next week -- followed by AGBT just a month later.  Indeed, I've been trying to mark out the "can't miss" talks for AGBT so I can resist over-scheduling them with meet-ups -- but many talks lack titles so that's not easy.  JP Morgan seems to have Illumina, 10X and Nanostring -- and not much else in the way of sequencing-space companies.  But time to prognosticate before all the news happens!

Should PacBio Abandon Their Set List?

In a piece on LinkedIn, Brian Krueger made a pithy comment that should give PacBio management pause.  In a series of bulletpoints he summarized key things he had heard from ASHG, and the one for PacBio starts with "And PacBio threw a party".  Parties with name musical acts has been modus operandi for PacBio Sales & Marketing for a number of years now, but I hope they seriously think about whether this is a good use of marketing dollars.  But fear not dear leader: if they do listen to Brian & I it's probably much too late to derail any plans for AGBT.

Concept: An Oxford Nanopore Adaptive Sequencing IDE

Oxford Nanopore's adaptive sequencing scheme is truly singular (but not Singular!), enabling computational adjustment of the sequencing process as it occurs.  A number of academics have demonstrated proofs-of-concept of different ways this capability can be used, with Oxford Nanopore slowly incorporating some of these higher level concepts into their MinKNOW operating software.  An idea has been rattling around in my head since London Calling that what this space truly needs is a full Integrated Development Environment (IDE) to support adaptive sequencing.  It's more than a little conceited for me to do this, given that I've contributed nothing to that field and the only adaptive sequencing experiment under my guidance was quite disappointing.  But it's an interesting enough idea that I can't resist.

Chatting Apton Acquisition with PacBio CEO Christian Henry

PacBio CEO Christian Henry chatted with me recently by teleconference on a variety of topics, but the focus was the recent PacBio acquisition of Apton Biosystems for $85M in equity.  As a regular reminder, my employer’s CEO reports in a sense to Henry, as he’s on the Board of Directors.  

A particularly interesting revelation by Henry is that PacBio had its eye on Apton in late 2021, essentially as soon as they completed the Omniome acquisition announced in July 2021 that formed the foundation for their now-released Onso short read instrument.    PacBio believed then that the desktop instrument design from Omniome wouldn’t be sufficient; PacBio felt compelled to have a path to a high-throughput instrument.  While they felt an internal effort was possible, an acquisition might shave many years off the timeline.  And PacBio liked Apton’s concepts and launched into discussions and even made an acquisition offer to Apton’s management, but no deal was reached – but nor were any bridges burned.

About a year later, PacBio was at ASHG unveiling the Revio long read instrument and sent new feelers to Apton – let’s explore a collaboration marrying our chemistry to your instrument.  Before long, just such a proof-of-concept instrument was underway, and in under two weeks positive results were in hand.  Results weren’t as good as with the well-tuned Onso prototype, but nor were they discouraging – perhaps with tuning the gap could be closed.  The proof-of-concept experiment didn’t have ideal density, the optics hadn’t been tuned and nor had the fluidics been optimized – the PacBio reagents had a significantly different viscosity than Apton had targeted.  But billions of reads at “not quite Q40” quality.  Henry particularly gushed over Apton’s optics, which achieve superresolution imagery but with rapid scanning times. This led to new discussions about what sort of structure any joint effort should take, which ultimately led to the acquisition – with PacBio particularly happy with the timing since the original Onso R&D effort was winding down.

So what will come out of all this?  Henry sketched the idea of a floor-standing model generating billions of reads.  Launch timing expectations aren’t being made public - Henry isn’t ready to put pressure on the development team – “yet”.  Accuracy in the Q40+ range and billions of reads per flowcell. Run times in the 2-3 day range - Henry and I agreed that nobody is interested in returning to the two week sequencer runs common with the first generation instruments such as GAII and SOLiD.   The unit would have sufficient onboard compute to perform the superresolution imagery processing as well as the downstream processing which is onboard the Revio.  Likely to have either 2 or 3 flowcells per run – Henry said “definitely multiflowcell” but “probably not 4 like Singular”.

From a commercial point-of-view, Henry believes that first they can capture 1-3% market share in the liquid biopsy space to create a multi-$100M business.  That’s a small slice of a big pie  - Henry isn’t making grandiose claims here.  But it’s also much easier to overshoot a small estimate than a larger one.  Henry believes that the current Onso will be important in this market, but ultimately there needs to be a big machine as well.  

He also sees the Onso instruments, and particularly an Apton-enabled high throughput instrument, as important for selling Revio and future long read instruments (more on that below).  He was very gracious about competitors all around – in his view Element Biosystems, Singular Genomics, Oxford Nanopore and the rest are important counterweights to PacBio drifting into hubris and complacency.

Some observers such as this scribe worry that the Onso short read platform will distract attention from the long read Revio/Sequel platform, but Henry is clearly still very invested in the long read side of the business - and a strong believer in sales synergy between the long read and short read instruments. Globally, PacBio is seeing success selling Revio plus Onso bundles. He sees the size of the commercial organization – now over 200 people – as an edge against small players like Element and Singular.   Revio, he says, is performing well in the field and performance enhancements will be coming late this year or early next year. That might include library preps from 100 nanograms or less of input DNA.   And 40% of Revio orders are to new customers, not previous Sequel line owners.  And with increasing interest in the small fraction of long DNA fragments in cell-free DNA, Henry sees possible crossover  between the Onso focus on cell-free DNA diagnostics (aka liquid biopsies) and the long read business – but also that competition in this space “keeps PacBio honest”

Henry says that PacBio is “deep in development” on a next generation SMRTcell, designed to enable 10K 30X human genomes per year – and many population genetics studies are opting for 12-15X coverage so that might be multiplied by a bit more than a factor of two (and with current Revio, that brings each samples slice of the flowcell to about $500).  At the other end, development of a benchtop system with a “dramatically lower”  pricetag is well under way.  PacBio is also investing heavily in computational biology, viewing long read computational biology as still having a lot of catching up to do relative to short read computational biology.

 

With regard to Oxford Nanopore,  Henry frequently grants compliments – but is also fiercely competitive.  So in one breath he praises MinION as a great product and “we won’t touch them”, but the next touts Revio for large scale long read studies.  He claims that the all in cost of Revio is better than Oxford Nanopore (a claim I’m sure ONT would contest – everybody, get out your green eyeshades!).  Henry noted that at current duplex rates, large oversampling is required on PromethION to cover a genome – which I’m sure ONT would counter with “wait until the next release of duplex”.  Henry claims that one “major institution” took delivery of a Revio and then mothballed their Oxford Nanopore instruments.

For cell free DNA in particular, Henry is very bullish on Onso’s accuracy being a major advantage.  In a head-to-head comparison of Illumina with Unique Molecular Indexes (UMI) and Onso without UMI, Illumina required four times as much data to achieve a similar level of accuracy.  Translational genomics player TGEN decided on an Onso plus Revio bundle after seeing this sort of quality improvement.  But Henry conceded the for most germline variants the advantage might not appear – though he did qualify this with a comment that Illumina’s filtering can lose coverage in some tricky spots in the genome.

It’s so much fun to track a space that is absolutely cutting-edge in terms of technology yet still has so much innovation bubbling.  Apton and Omniome decided that the best route to market for their technologies was to be acquired; Ultima, Element and Singular are trying the independent route.  Acquisition isn’t a panacea - I’m sure anyone who worked passionately on LaserGen was floored by Agilent’s decision to shelve that technology, and if I had spent long hours on Genia or Stratos I’d be unhappy with Roche’s inability to launch a sequencer.  Onso is still early in its launch phase in a crowded market, with more than a little skepticism in social media as to whether it can carve out a niche.  It will take at least a year or two before we can really assess Henry’s bullish position on the technology, and perhaps another couple of years before we see Apton technology in the field.  But for me, watching all this unfold never begins to bore

Two More Automation Partners Join PacBio Compatible Program

A significant challenge for the long read sequencing vendors has been that short read sequencing has a decade and a half head start in evolving a tools ecosystem.  New entrants such as Singular Genomics and Element Biosciences can take the strategy of building short bridges to existing tools designed for Illumina whereas the long read players must often build anew, as tools and protocols sufficient for short reads often are lacking performance on long reads.  At J.P. Morgan in January, PacBio had announced a PacBio Compatible program to highlight products which specifically support PacBio sequencing.  This morning, two more automation vendors -- Revvity and Tecan -- have joined their liquid handling automation to the program.  I got a walkthrough of the new announcement from PacBio's Amit Patel yesterday.

Apton (Super) Resolution to Be Acquired Fulfilled by PacBio

Wednesday night brought the news that Pacific Biosciences has both officially launched their Onso desktop short read sequencer and bought technology for a high throughput version of it by acquiring Apton Biosystems.  Apton had been developing their own short read chemistry and an instrument based on super0resolution imaging to go with it and was apparently relatively close to launch.  PacBio got Apton for $110M, with $85 paid now in PacBio stock and the remaining $25M "stock and cash add-ons" according to GenomeWeb (premium/free via ex-Twitter) - so presumable based on certain milestones being met.  

Overheard in a Thai Restaurant

An amusing incident happened on the Sunday of Memorial Day weekend that is a reminder that even when there are no walls the walls in the Boston area can have biotech-tuned ears.  Oh, and a funny quirk of fate that I swear I'm not making up.

Illumina: Where Was the Board?

Sunday brought news that Francis deSouza had resigned as CEO of Illumina.  It at first might have seemed he had survived the boardroom challenge from activist investor Carl Icahn, losing only one ally - Board Chairman John Thompson.  But that apparently effectively made him a lame duck, and he is now leaving immediately -- leaving no one at the helm of Illumina momentarily but also eliminating any interference from deSouza with the installation of his successor.  If you have access to STAT+, Matt Herper's commentary is very informative (I'd expect nothing less).

London Calling 2023

Called Back To London Again

After a too long pandemic-induced hiatus, I'm in the UK for this year's edition of London Calling.  I talked myself out of going last year well in advance, which would have been interesting as my rapid tests were still coming up positive about the time I would have needed to fly from Boston over the Atlantic.  And while I've been watching remotely, I've been dismal over the past year in actually writing anything about it.  Which was foolish on my part as ONT has been going through an interesting transition.

Thoughts on Unexpected Sequences Found In COVID mRNA Vaccines

Writing this piece is not easy, not only because the topic matter is completely in controversies around SARS-CoV-2 and the vaccines for it, but because the data was generated by someone whose outspoken opinions on any COVID-19 public health topic are nearly always ones I find myself in opposition to.  Someone who periodically lobs my way personal attacks on my ethics.  It doesn't help that these results will be certainly misused to attempt to undermine public confidence in the vaccines, or that this post will probably attract a lot of commentary that I don't wish to address because of the adage that generating misinformation takes far less energy than rationally correcting it.  But, data is data and in the end I believe that whatever our differences, the data generator is not someone who would construct a hoax.  And in any case, the results can be checked, so if somehow it were a vicious hoax that could be exposed.  And importantly, I feel that what has been found should be discussed, as no advanced technology is ever perfect - these results I feel suggest new standards for the design and implementation of mRNA therapeutics.

Is Illumina Delivering the MVP of Long Reads?

At AGBT last week Illumina released additional details on their still incubating Complete Long Reads (CLR) product (formerly known as Infinity) but is still holding back both some interesting technical information as well as exact performance specifications.  Illumina is already floating some of their marketing messages, which in some cases are dependent on some of those still-in-flux specifications and some of the claims may not withstand careful scrutiny.  And Illumina continues to make statements that irritate anyone with deep technical knowledge of the long read space.  The reaction by attendees was definitely mixed - one long read aficionado even offered me a very spicy title suggestion for this entry.  Alas, I can't use it, as it would be a bit of an inside joke based on a portion of a presentation that the presenter asked not be tweeted.  So instead you get the above title,  which may not be what you think. 

What's AGBT Like?

AGBT begins in less than 24 hours, and the signs are everywhere here at the Diplomat Resort in Hollywood Florida.  I arrived Friday with family, and the count of old friends I've chatted with is steadily climbing.  If you somehow forgot about the meeting, the insides of the elevator doors will remind you. This is the fifth time I've attended in person, plus heavy monitoring of about twice as many via Twitter.  It's one of the premier events of the genomics conference schedule, and if you haven't been it's certainly fair to ask why?  Or whether you would want to go to a future edition?  So I'll try to capture what makes AGBT so irresistible to many but also why it just might not be your cup of tea

AGBT 2023 Is Nearly Upon Us!

AGBT is less than a week away in Hollywood Florida - and I've been letting everything else get ahead of writing anything here.  The JP Morgan Conference at the beginning of this month didn't have major fireworks from the sequencing vendors, but did have some news.

PacBio Revio: Same Footprint, 80% The Time, 15X The HiFi!

PacBio has been rolling out announcements around the ASHG meeting and now delivers a huge one: the next generation SMRT instrument “Revio” will roll out next spring and it’s a big step up in throughput. With Revio’s 15X boost in per-run throughput over Sequel IIe, PacBio is touting this as 30X HIFi genomes for under $1K sequencing consumables per genome. 

Better Than FizzBuzz: First Bioinformatics Problem in an Erratic Series of Indeterminant Length

Periodically in my work or during writing this blog I come across computational problems that have the aspects of making, at least in my mind, very good teaching problems.  Some of the characteristics are that the basic problem is relatively simple to explain, the skills required are reusable on other problems, the concepts are germane to other problems and that the posed problem can be expanded in steps to something much richer.  Such problems might even be the nucleus of undergraduate or even high school bioinformatics projects, though with the recent news of a high schooler sequencing his dead pet angelfish's genome the bar for high school projects has leapt a few notches! In contrast to a programming problem that doesn't fit these, I'm going to tag such posts as "Better than FizzBuzz".

General Inception Aims to Ignite New Company Formation

A week ago, a company calling itself General Inception emerged from stealth as a new concept, which they call an “Igniter company”, to promote the formation of new life sciences company.  As described to me in a phone conversation with General Inception CEO Paul Conley, General Inception provides a range of science and business expertise and support to enable embryonic ideas to condense into functional startups.  

The igniter metaphor Conley offered me is the spark plug of a car: it is required to start the engine and continues to provide a key part of the functioning whole.  Conley extended this to say that General Inception plans to go for the ride, but let the scientific founders occupy the driver’s seat.  But another ignition metaphor occurred to me, the skill of turning a tiny spark from flint and steel into a raging campfire.  Without careful nurturing, most tiny sparks will never ignite a blaze; only with careful and staged addition of oxygen and fuel does this reliably occur.

General Inception is not a fund, Conley stressed, but structured as a corporation. The ultimate goal is to make systematic and reproducible the generally artisanal craft of discovering and nurturing new ideas – as well as sometimes terminating efforts early that do not appear successful.  

So what does General Inception offer?  First, some of the boring business functions such as quotidian finance functions such as paying bills.  Also a wide range of expertise, from access to technical experts in a diverse set of biological disciplines to persons familiar with estimating markets and development paths. General Inception has lined up Contract Research Organizations and Contract Manufacturing Organizations, but not just as contract partners – General Inception has “meaningful” equity stakes and perhaps board seats in these companies.  A key goal of General Inception is to identify key experiments which can be run quickly at these partners to test project concepts.  This might be simply reproducing results from an academic lab or perhaps running a key experiment to de-risk the project.  An example of a CRO partner is Triple Ring Technologies, which offers company incubator services and facilities both in the San Francisco Bay and Boston areas.

Interestingly, General Inception is casting a very wide net.  Any life science concept is potentially a target: therapeutics, diagnostics, tool companies, agriculture, synthetic biology or whatever else is centered around biotechnology.  Within the company there are defined practice areas: Tools & Diagnostics; Cell Engineering & Synthetic Biology; Therapeutics.  But these are intended not to be siloed fiefdoms but rather foci which overlap each other and reinforce each other. After all, so many technologies are converging - a diagnostic may require synthetic biology or a therapeutic cell engineering.  Conley believes human health will continue to grow – but non-health life sciences might grow even faster and overtake healthcare in terms of total economic value, so he is positioning the company to support company formation in all areas.

In terms of geography, not only are they scouring US labs but also in Europe.  In the latter case, the companies that emerge might have R&D remaining in Europe but commercial operations headquartered in the US.  Conley says the venture environment in Europe remains more conservative than the US, so General Inception can make a particularly large impact in Europe by helping ideas cross “the valley of death” to where a venture firm is comfortable investing in it.

Not only is General Inception stalking the halls of academia, but they are also talking to existing companies about dormant assets that might find new life in a startup. And General Inception hopes to form long-term relationships with innovators; having an idea fail early won’t be held as a demerit against the academic.  

In terms of deal structures, General Inception looks to set themselves up as a founder, with founder’s common stock.  Generally they would be funding companies at the seed or pre-see stage, perhaps taking the place of angel investors or “friends and family” investments.  Venture capital firms often demand preferred stock, which gives them first rights to the financial carcass of failed ventures - General Inception will be taking the same risk as scientific founders of not getting anything from liquidated companies.  

General Inception itself has raised $60M from a set of venture capital firms. Their goal is to reach a steady state in which around 25 companies are seeded and graduated annually. General Inception also sees itself as evolving to an information business – with a large experience base of startups they hope to glean new insights into predicting what ideas work and finding the best company structures to maximize the chance of success.  Venture firms that invest in General Inception will have early access to companies incubated by the company.  Conley has been piloting the company since February 2020, refining the approach and the set of expert resources which General Inception can draw on

In my career I’ve interacted with startups in a variety of contexts - as a potential employee or consultant, an actual employee or consultant and as a potential or actual partner.  I’ve also daydreamed a rough business plan or two.  I will be the first to proffer that this is hardly a comprehensive exposure to the variety of ways that companies are seeded.  Thinking back on experiences such as Warp Drive, I can see the value of quick proof-of-concept experiments to either validate a company or simply nip off an idea that is unlikely to ever bear fruit – but I also know how complicated it can be to identify such experiments or assemble all the components to perform such an experiment.  So I’m intrigued by General Inception and wish them well, though I reserve a certain amount of skepticism that starting new companies will ever be anything other than artisanal.

What Conversation Does Each Sequencing Instrument Vendor Wish You To Have?

Illumina Roadmap Part 2: Infinity Becomes Illumina Complete Long Reads

The Only Thing Clear About Infinity Is It Is Now Complete Long Reads. 

Illumina told us a new name for Infinity -- Illumina Complete Long Reads -- and an initial pair of products, but didn't reveal anything new about the underlying tech.  They threw out a number of claims, but very vague ones.  Particularly confusing is that it "isn't synthetic reads".  If not, then what is it?