Exclusive Interview with Complete Genomics – These Guys Get It

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I took a look inside Complete Genomics' lab. What I saw turned me into a believer.

The future of human genetics will arrive when we understand how each gene in your DNA interacts with every other gene to form who you are. In order to get that understanding we're going to need to sequence a huge number of genomes. And in order to sequence genomes we're going to need Complete Genomics. The Mountain View based startup recently went public (NASDAQ: GNOM); with their requisite silent period ended we finally got a chance to tour their facilities and talk again with their CEO Cliff Reid. We were impressed. Complete Genomics isn't going to conquer the entire world of DNA testing, but the kingdom of human genome sequencing they've carved out for themselves looks amazingly well fortified. As far as I can tell, if CG really takes off no one else will be able to challenge them in whole human genome sequencing for years to come. We asked Cliff Reid about the IPO, the genomics market, and some recent advancements in Complete Genomics' analytical software. Check out his answers in the videos below.

Complete Genomics doesn't sell a device, they sell a service. Companies like Illumina make DNA sequencers they sell to other companies. Reid and his gang take DNA samples and return with huge amounts of DNA data. Customers never need to deal with the biochemistry. That full service approach helps Complete Genomics focus on increasing the number of human genomes they can sequence for customers, and lowering the price for each. In the following clip, Reid gives us an update on the company, including the success of the IPO, and a look at its production capability and the current price of sequencing human genomes.

Getting to explore Complete Genomics' Mountain View facilities was pretty amazing. I was struck by the relatively small size of the sequencing lab (though there's plenty of room for expansion) and the degree to which automation is used. The company can produce 400 whole genome sequences each month, but there's only ever two technicians working at any given time in the sequencing room. Robotic instrumentation and equipment makes the lab almost seem like a ghost town, but there's a lot of action going on. I wish we could have turned our cameras on while touring that place, I bet many of you (and all of CG's competitors) would have loved to see what they had cooking.

While we didn't get any trade secrets out of Reid, the recipe for Complete Genomics' secret sauce is pretty clear. This company is about doing one thing and doing it really well. Other big names in sequencing (Illumina, BGI, etc) are looking to handle many different kinds of genetic reading such as examining RNA, sequencing microbes, and sequencing animals. Complete Genomics is doing just one thing - whole human genomes. With that laser-like focus comes the ability to scale their entire company around a central mission. As we've said in previous coverage of this company, economies of scale, and single-mindedness in action will help Complete Genomics get cheaper and cheaper, faster and faster.

Eventually that means you'll have access to inexpensive sequencing for your own genome.

Yet it will take a while to get there. Most of the whole genome sequencing done today is purchased by research labs, not by individuals looking to understand their own health. That's how it should be. It's going to take years for researchers to fully understand our DNA and what the variations in our genes mean. Selling genome information to individual customers like you and me would be premature. For now, Complete Genomics is focusing on the research market and helping them make the discoveries that will revolutionize genetics. Once the price per genome comes down, and the science behind genetics is better understood, Complete Genomics will transition into the consumer market. Reid says as much in the following video:

Complete Genomics isn't 23andMe, Pathway Genomics, or any of the other companies selling genetic tests on the market today. First off, those groups are only testing a small subset of your entire genome for simple variations in individual letters of DNA (single nucleotide polymorphisms or SNPs). Complete Genomics is sequencing whole genomes - all 3 billion letters of DNA. Just as importantly Complete Genomics is waiting until researchers know more about the genome before they try to offer genome sequencing to consumers. That's different from the current genetic testing companies that the FDA and congress are worried about. Those businesses will sell you genetic tests today, while much of the science is still not completely understood. Don't get me wrong, I think there's a place for that. Complete Genomics, however, is waiting until there's an actual use for you to know your whole genome sequence before they try to sell it to you.

In the years ahead someone is going to have to process thousands (millions?) of genomes before we understand our DNA well enough to make the sort of pinpoint health recommendations that the public expects from this promising technology. Who's going to sequence all that DNA? My guess is Complete Genomics. Again, getting back to that focus on whole genome sequencing, the company has built it's entire technology around reading human DNA faster, better, and cheaper than anyone else.

The center of their business is their fluorescent read technology, which analyzes nanoballs of DNA that correspond to different A, C, T, G 'letters' of genetic code (learn more about the nanoballs on the Complete Genomics website). In Reid's words they, "use silicon to read silicon". A silicon based semi-conductor camera is precisely aligned with a different silicon wafer full of tiny pockets where the nanoballs sit. When I say tiny, I mean tiny - those pockets are just 300 nanometers across. The camera only has to use a few pixels (soon even fewer will be needed) to optically read each nanoball and determine if it contains an A, C, T or G.

According to Reid, Complete Genomics had reached the limits of optical reading technology. They are (or soon will be) using as little digital information to read each letter of DNA as you possibly could. The best other companies could probably do is match them. Add in the fact that their automated reading technologies are getting faster, and their analytical software is getting smarter, and you can see that Complete Genomics is quickly making itself the foremost leader in whole human genome sequencing.

Even if another company finds a way to sequence whole genomes with the same speed as Complete Genomics, I still think Reid and his cohort will come out on top. By focusing on just one product (whole human genomes) Complete Genomics will develop an unprecedented amount of experience in their field. They'll discover all the little undiscovered idiosyncrasies that make human genomes unique compared to other sequencing projects and they'll understand those twists and turns better because human genomes will be the only thing they work with. Single minded focus will help Complete Genomics learn all the tricks, and this will help make them more streamlined, faster, cheaper, and better at analyzing human genomes.

In the following video, Reid discusses Complete Genomics' technology. Recently, the company announced a particularly exciting advancement in their software for digital analysis of DNA. Now when a researcher sends a genome to be sequenced CG will include information about copy number variation and structural variation - data that can illuminate where in a cancer cell genome that DNA has gone bad. Basically Complete Genomics is making it much easier for scientists to translate genomic data into insights about the nature of cancer. Coupled with a growing assortment of open source analytical code (CGA tools), Complete Genomics' software is accelerating research into genetics. Pretty cool.

Other companies, like Ion Torrent, have developed DNA reading technologies that use semiconductors rather than optics to sequence genes. These CMOS based sequencing technologies have been hailed as the next step forward in genetics. As you saw in the video, Reid explained the reason why they aren't afraid of semi-conductor based DNA readers. Can we all say that reason together? Complete Genomics only has to worry about whole human genome sequencing. While we toured the Complete Genomics facility, Reid pointed out that if you calculate how much current CMOS tech will cost to sequence a full human genome, the price would be many hundreds of thousands of dollars (or more). The big advantage semiconductor sequencing has is that it can fit on a desktop. Complete Genomics doesn't want to fit on a desktop and they don't want to be portable. They just want to sequence whole human genomes.

The same logic applies to those companies looking to push the boundaries of how much DNA they can read at a time. In the sequencing field, there are both 'long reads' and 'short reads'. The human genome has more than 3 billion base pairs (those A,C,T, G letters). In order to sequence a genome you end up first sequencing smaller chunks of those letters, and then pasting those chunks together to get the full 3 billion letter code. The shorter the chunks you use, the more you need to double check your work and the more complex it is to paste things together. 'Short reads' sequence each chunk multiple times (10x or more for some Complete Genomics projects) while 'long reads' get away with doing that less. Long reads, however, also tend to be slower and more expensive. As Reid explains, long reads are good for some things, but Complete Genomics isn't into those things. They have improved software that makes short reads the most economic way for them to proceed with human genomes.

This company knows exactly what it wants to do. And it is doing it really well.

That doesn't mean I'm completely free of concerns. I'll stop my blatant cheerleading for a second and do a little math. Reid didn't give us an exact total for how many genomes they've sequenced (that's ok, we know from other press materials that the number is more than 500 - damn impressive) but he did tell us that his current capacity is around 400 genomes per month. Those sell at a price of $10,000 each (or less if bought in bulk). Assuming there's enough market demand (which I think there is), that means with current levels of production Complete Genomics could make around $4 million a month in revenue. So, maybe $48 million a year? Remember, even as Complete Genomics increases its production to drive up their revenue, the price per genome is planned to recede. This company has spent "tens of millions" on improving their software, and according to their own reports they spent more than $20 million in Q3 of 2010. Is $48 million per year enough for Complete Genomics to grow? Reid says they are very happy with their IPO, but I know that if I were in his place I would have been even happier if they had raised their original target of $80M instead of the $50M or so they got.

I think this next year is going to be a critical time for the company. Depending on funding and revenue they could have to stay on a conservative growth curve. Or, if they secure the finances, they could really ramp up - trust me, the technology looks like it is more than ready.

I really want a whole genome sequence to cost less than $1000 and not simply because I 'm itching to peer at my own software code. By the time we hit that price point, researchers will have had the opportunity to look at thousands (tens of thousands?) of genomes and finally get the data they need to puzzle out some of the secrets of our DNA. That future may be nearer than we think. For now, Complete Genomics looks like the company that is going to take us there. I can't wait.

Update: No person at Singularity Hub currently owns any stock in Complete Genomics or owns any financial stake in the company whatsoever.

[image credit: Complete Genomics]

[source: Cliff Reid/Complete Genomics]

Discussion — 16 Responses

  • Emanuel Hoogeveen December 12, 2010 on 5:23 pm

    The segment on short versus long reads in the last video was very helpful and informative 🙂 I do still wonder about one thing, and that’s whether we’ll ever get 100% coverage and whether that would even be useful compared to what we’re getting now.

    Due to things like copy number variations, it sounds like you can’t just put full genome base-pair sequences in a database, then look at two or more raw genome datasets side by side – as the lengths wouldn’t match up. But of course you could do a relative search, especially given what we know about SNPs. So I wonder if you could tag each segment for which varying numbers of subsequent copies exist and instead store just the tag ID and the number of copies present in the genome (with a pointer to the full subset of the sequence) – then place those datasets side by side for analysis.

    Though, I suspect what I’m saying here is already being done – I wish I had time to take a few classes in molecular biology and genome modelling 🙁

  • Fastudius December 12, 2010 on 7:45 pm

    Full disclosure please: Do you own shares of CG?

    • Keith Kleiner Fastudius December 12, 2010 on 9:13 pm

      It is our company policy to always disclose any potential conflict of interest that we are aware of. The story as been updated with the following statement:

      Update: No person at Singularity Hub currently owns any stock in Complete Genomics or owns any financial stake in the company whatsoever.

  • Sam December 12, 2010 on 9:04 pm

    This was less of an article and more of a full blown CG fellatio session

  • Keith Curtis December 13, 2010 on 6:43 am

    The only question I have is how much free software they are using. I have discovered a lot of proprietary software and data repositories in the biotech field, and this is the biggest reason why progress is so slow.

  • Michael Vassar December 13, 2010 on 12:25 pm

    What’s their advantage over Halcyon?

    • Keith Kleiner Michael Vassar December 13, 2010 on 5:15 pm

      Michael, Complete Genomics has already sequenced hundreds of whole human genomes and is now on target to produce 400 per month! I would say that is a substantial advantage over Halcyon which is making lots of promises, but AFAIK they have not announced publicly that they have even sequenced one entire human genome. Where’s the beef?

      Halcyon looks interesting, but at the moment they are all talk and no show. I sincerely hope they succeed and look forward to seeing what they can do, but at the moment Halcyon is just another of millions of companies out there making big promises that aren’t proven yet.

      • SpaceMafia Keith Kleiner January 7, 2011 on 7:33 pm

        Try getting CG to actually sequence anything. They’re honestly impossible to work with — unprofessional, all talk, blatantly false PRs, more expensive & less capable than their competitors… I have no interest or bias towards or against any sequencing company; I just wanted one that could do some damn sequencing. It definitely wasn’t Complete Genomics.

  • Johnnyfitness December 16, 2010 on 6:10 am

    Illumina (ILMN) is still the company to beat. I’d buy stock in Illumina– before Complete Genomics. Look what happened to Helicos. It is effectively finished. Illumina, the industry leader, by far, is already an $8 billion company, and will be a $50 billion company within the next 2 or 2-1/2 years. Don’t bet against the Microsoft of the genomics industry.

  • Juancevenka December 16, 2010 on 6:22 am

    It is also rumored that Apple is busy developing their own sequencing technology. It is going to be a killer app for a future iphone. The “medical” iphone will function as a diagnostic device, as well as a communication device.

    • Guest Juancevenka December 28, 2010 on 7:07 am

      That must be some seriously powerful weed you’re on! 😉

  • Jordan December 17, 2010 on 2:56 am

    I enjoyed reading your article. It is exciting to see the work being done by Complete Genomics and how they stand apart by sequencing whole genomes. A major company in this space that unfortunately wasn’t mentioned is Knome (http://www.knome.com), in Cambridge, Mass. Knome takes the data from companies like Complete Genomics and runs full analyses and interpretation of whole genomes for biomedical researchers and consumers. In fact, Knome has been responsible for sequencing and analyzing more human genomes than any other company in the world.

  • Mike Cower January 6, 2011 on 3:26 pm

    The author says, “As far as I can tell, if CG really takes off no one else will be able to challenge them in whole human genome sequencing for years to come….Even if another company finds a way to sequence whole genomes with the same speed as Complete Genomics, I still think Reid and his cohort will come out on top.”

    I guess Aaron Saenz has been a sleep behind the wheel, or perhaps a very poor researcher. The article fails to mention the one (larger) company competing in the exact same space. A company that not only went public before Complete Genomics, but prior to IPO was the largest venture capital funded company in this space (perhaps ever). Pacific Biosciense has similar technology and is shipping product now that might very well might be faster and cheaper (I’ll let others debate the performance battle). Sounds like that multi-year “lock-up” the author mentions isn’t necessarily the case.

  • Theflyer February 5, 2011 on 10:34 pm

    In September 2009, they claimed they’d sequence 10,000 genomes by the end of 2010. Did they do it?