Oxford Nanopore squares up to Illumina's sequencing might

Oxford Nanopore’s £100m ($126m) financing is the biggest funding round for a medtech company this year. If the UK group is to be believed, its nanopore-based genome sequencing technology could shake up the current market, which is led by Illumina.

“We’re producing the laptop or mobile phone of sequencing,” a spokesperson told EP Vantage. “We want to disrupt the model of elite, trickle-down genomic analysis.” But even with the extra funds, which Oxford will plough into its commercial operations, it faces a tough battle against Illumina’s marketing power.

Real time

Oxford is confident that its technology will win the day. Nanopore sequencing can read DNA in real time, which gives it the edge over current short-read technologies, the company says.

With traditional big boxes it might take a few hours or a couple of days to prepare the sample, and processing can take three days to a week, the spokesperson said. “At the end of that time you’re delivered a bolus of data you then have to analyse.”

Meanwhile, she said, with nanopore sequencing: “You start your experiment and carry on running the experiment until you have the answer you need – and then you stop and you have your result.”

This is important for clinical applications where speed is of the essence, such as one recent use of the technology: investigating the origin of a fungal pathogen outbreak in a UK hospital.

Oxford’s products employ nanopores that read a strand of DNA as it passes through a membrane – an electric current flowing through the pore changes depending on the DNA base. An entire human genome was recently sequenced with it – the first time for a nanopore technology – at a cost of around $2,750; before that it had been limited to smaller genomes, for example those of bacteria, viruses and fungi.

Now that Oxford has passed this milestone, the technology is ready for primetime, the company believes.

$1,000 genome

The group is still some way off the hallowed $1,000 genome, something that Illumina can boast of. However, to achieve the $1,000 genome with Illumina’s products “you have to spend $10m on the machine and $5m per year maintaining that machine”, the spokesperson said.

Meanwhile, Oxford gives its MinION portable sequencer away in a $1,000 package that also includes consumables worth over this amount, she added. “Some people find it quite unusual that we don’t charge for our box, but that’s because we have a long-term goal of being the ubiquitous technology.”

This aggressive approach might be for nothing if the market turns out disappointing, and recent signs have not been good. Illumina issued a profit warning in October after missing its third-quarter sales expectations, blaming declining demand for its high-throughput genetic sequencing machines (The Illumina mystery, October 12, 2016). 

The research market looks to be becoming saturated, with clinical sequencing not catching on as quickly as had been hoped – and this could also be bad news for Oxford.

But the spokesperson had some comforting words for the group’s investors. “When IBM said there was a market for five computers in the world, that’s because they were so difficult to use [that] of course you could only market them to five people.”

The group hopes that the rise in sequencing will be analogous to the growth of the home computing market once simpler technologies become available.

Emerging markets

And growth could also come from developing markets, something Oxford is evidently aiming at: its fund raising was led by a new investor, the pan-Asian fund GT Healthcare, which has a particular focus on China. The round also included existing investors Woodford Investment Management and IP Group.

As well as the MinION, which has been around since 2015, Oxford recently launched the PromethION, a larger benchtop instrument with a modular design. PromethION packs the power of about 300 MinIONs when it’s at full power, the company says.

The spokesperson is adamant that the newer device is not just for large academic centres. “Anything is for anyone. It used to be that bigger boxes were for bigger centres, and certainly PromethION is good for them. But that doesn’t mean that a smaller centre can’t have a PromethION and be able to do things they weren’t able to do before. This is the model we want to bust.”

If Oxford wants to succeed in dislodging Illumina, this is exactly what it will have to do.

To contact the writer of this story email Madeleine Armstrong in London at [email protected] or follow @ByMadeleineA on Twitter