Open up your financial umbrellas, Complete Genomics is going to make it rain. The Mountain View startup has built a name for itself as one of the premier providers of whole genome sequencing for humans. Now we are just days away from their IPO. According to the filing statements with the SEC, Complete Genomics will offer 6 million shares of their stock at a price between $12 to $14. To encourage prospective investors to leap at their offer, the company released details of its current and future production. At the beginning of the year, the worldwide total number of human genomes ever sequenced was less than 300. Complete Genomics produced that many in the third quarter of 2010 alone. They hope to produce 400 genomes per month by the end of the year. These are big numbers, and they’re likely to get bigger. Much much bigger. In our interview with CEO Cliff Reid back in January, he claimed that Complete Genomics would sequence 1 million human genomes by 2014, and at prices substantially lower than any on the market today (possibly < $1000). The race to establish whole genome sequencing supremacy is underway, and this IPO will be a sign of how much faith the public has that Complete Genomics can come out on top.

It’s been a big season for genome sequencing. Ion Torrent, a company developing CMOS based DNA sequencing technology was purchased by Life Technologies for $375 million. Critical parts of the CMOS approach to DNA were actually licensed to Ion Torrent earlier in the year by DNA Electronics, a UK company looking to develop handheld genetic scanners that we’ve discussed before. Pacific Biosciences (NASDAQ: PACB), which has developed optics based DNA sequencing tech, had its IPO at the end of October and raised around $200 million. BGI, China’s premier genome institute recently announced it was teaming up with OpGen to further their own optical approach to DNA sequencing. Everywhere you look, from the EU to California to Asia, forces and finances are gathering to see who will provide the next generation of genome testing and analysis.

This heightened activity in the field may be just what Complete Genomics needs to fuel their IPO. With Ion Torrent selling for $375 M and Pacific Biosciences raising $200 M at a similar share price (~$16), Complete Genomics gets a good idea of what it can raise. The $86 million it hopes to pull in through its stock offering will nearly double what it has gained through venture investments. Complete Genomics gathered $39 million in venture funding this August putting it up to around $91 million in total. With another $86 M, Complete Genomics would have the funds to expand its new sequencing centers aggressively – a key requirement if they are to develop as quickly as Cliff Reid seems to be planning. Investors may look at Complete Genomics’s competitors recent financial gains, compare their tech to CG’s rapidly growing capabilities,and flock to the IPO.

Yet such investments are not without their concerns. Even while raising venture funds, Complete Genomics was fighting off patent infringement lawsuits from Illumina - perhaps their main rival in whole genome sequencing. Genetic testing based on SNP (single nucleotide polymorphisms) has faced growing concerns over accuracy and relevance in the light of real and perceived errors. The field of genetics, in general, has faced criticism for the lack of real world benefit for patients in the ten years after the first human genome was sequenced. Investors may see Complete Genomics’ cheap whole genome sequencing, which provides phenomenonally more data than SNP tests, as the technology that will come to dominate genetics and reconfirm its importance in medicine. Or they may see the uncertainty in genetics as a great reason to avoid investing in the field altogether.

The same factors which make investments a risk make them very exciting to techno-optimists like myself. I can’t say for certain that Complete Genomics will be the undisputed leader in whole genome sequencing. There’s too much potential competition from Illumina, and the CMOS and optical approaches developed by others are too attractive looking, to call things in Cliff Reid’s favor at the moment. Still, I do think Complete Genomics has the right approach to sequencing: specialize in one field (human genomes) and use economy of scale to push towards ever cheaper and larger production. 400 genomes a month by 2011 is an amazing accomplishment, especially as the costs for materials for each genome may be as low as $1800. The only way Complete Genomics is going to lose is if some other company can beat that. Either way, scientific research and personal genomics will have won. Cheap and fast whole genome sequencing will provide us with huge amounts of new genetic data that we can use to understand illnesses, and provide better healthcare. When your genome costs less than $1000 to sequence, millions all over the world will be encouraged to get themselves tested and claim an informed ownership of their own genetic information. Win or Fail, Complete Genomics’ IPO is another sign that the next DNA revolution is near.

[image credit: Complete Genomics]
[sources: Complete Genomics, SEC]

Europe’s leading genetic sequencing provider, GATC Biotech, recently announced that it would sequence 100,000 human genomes by 2014. Based in Germany, GATC plan on using sequencing technology from other industry leaders, including Illumina’s HiSeq2000 and Pacific Bio’s PacBio RS single molecule platform, to achieve their goal. They are reportedly already on target to finish 100 human genomes by the end of 2010. To facilitate the ramp up needed to hit the 100k mark in four years, GATC has created a new unit, and has grown their staff to 120 employees. They predict that sequencing customers will come from the pharmaceutical and diagnostic industries, as well as academia. While GATC isn’t adding any new technology to the whole genome sequencing game, they are a major force in Europe, and seem to have the resources necessary to make their goal a reality. With another company competing for sequencing dominance, the chances for cheap reliable access to your own genome are looking better every day.

President Kennedy famously put the US on track to win the space race by setting the goal, “… of landing a man on the moon and returning him safely to the earth.” Whole genome sequencing is now entering a similar race, with similar bold statements by prominent companies. Yet no one seems certain as to where the moon is, metaphorically speaking. Complete Genomics has announced it will sequence a million genomes in the next five years. GATC has its 100k genome goal set around the same time frame. Which of these is the important landmark? Does it really matter if either one succeeds?

Globally, the number of human genomes that have been sequenced is still in the low hundreds. With such a small data set, the number of things we can learn from a genome is still fairly limited. As we mentioned before, it has been 10 years since the first human genome was sequenced and we still haven’t had a revolution in genetics. How many genomes will it take before we get there? We may have major breakthroughs by the time we sequence a few thousand genomes, or it may take us two or three million before we find the connections needed to make big breakthroughs in genetics. Those leaps in understanding are going to be more meaningful than hitting some arbitrary mark (1 million or 100,000) in the number of genomes sequenced.

The real saving grace of all this competition to sequence the most genomes quickest is that it is driving prices down rapidly. Illumina’s HiSeq2000 and other instruments are drastically reducing the reagents costs needed for each genome. Complete Genomics is already looking to offer genomes at less than $10,000 USD this year. With service groups like GATC getting into things, we’ll hopefully see prices plummet in the next five years. That will help research teams, in the pharma industry or academia, find those major breakthroughs in genetics we’ve been waiting for. It will also mean that millions of people around the world would be able to afford to get access to their own sequence, especially if prices fall below the $1000 mark. In the end, I’m not terribly thrilled that GATC is aiming to hit the 100k genome goal by 2014, but I am enthusiastic to see what kind of changes in genetics their efforts might enable.

[image credits: GATC Biotech]
[source: GATC Biotech Press Release]

Complete Genomics is pushing down the costs of sequencing the human genome.

It’s getting progressively cheaper to sequence your entire genome. Earlier in June, Illumina announced it would provide sequencing for close to $50k, half of their original price. Not to be outdone, Complete Genomics just released on Monday that it had gathered $45 million dollars in funding. The Silicon Valley based company is planning to use that money to further develop their streamline sequencing operations so that they can offer a complete genome for just $5000 by next year. CG’s goal is to finish 10,000 sequences by years end 2010. Even though that’s later than we had hoped, it’s still a whole lot of DNA and at the cheapest price for a whole genome seen so far. The question is, can they really pull it off?

We’ve been looking for a company, any company really, to break the $1000 price mark for a complete genome sequencing sometime in the next few years. That’s about the point where retail sales of the service will explode. With their exponentially decreasing price tag, Complete Genomics might be on that path. However, we know of at least one company that is trying to reach that goal by the end of this year. Stay tuned for that story in the next few weeks.

If you’ve never heard of Complete Genomics, read our first and second story to catch up. Basically they use a common form of short read sequencing and throw in a ton of computer power to sequence a human genome. Interest in personal genomics is escalating as genetic links to diseases are discovered. 23andMe already offers some testing for such diseases and is hoping to gather samples for further clinical trials. By providing the entire genome for perusal on the cheap, CG could make it economically feasible to expand that research into many more illnesses. Already, we’ve shown you how some facilities are erroneously promising to predict a child’s aptitude based on genetic sampling. Perhaps with the cheap sequencing CG could provide, scientific research will match pace with the growing demand for such testing.

Daniel MacArthur of Genetic Future was able to pry CG head Cliff Reid to provide some details in how they hope to achieve their goals. First, Reid disclosed that the test won’t be offered directly to consumers, but rather through retail providers such as Knome and 23andMe. That means the price you or I will see could be considerably higher than $5k. Whatever the retail price, Reid promises 120 billion base pairs sequenced, 98% of the genome, with just one error in 10,000. That’s considerably better stats than what CG offered in February (92% of genome, about one error in 1,000).

Between now and year’s end 2009, Complete Genomics will focus on its dozens of customers currently in the line up. These include the Broad Institute out of MIT and Harvard which announced it was purchasing at least 5 genomes from CG in March. The Broad Institute reportedly paid $20k for each of their genomes which might be taken as the current baseline price for CG customers. If so, that’s a factor of four that the company has to make up between now and next year.

But scaling is no problem for genome sequencing. Remember that it took 15 years to sequence the first human genome, but the next 6 were done in 24 months. Now we’re talking about doing thousands a year. That’s just nuts and one of the amazing parts about sequencing that I love. Exponential growth is sexy science. And it’s supposed to be one of CG’s strengths. They just finished their first genome in the summer of 2008, and are now on schedule to finish 100 by the end of 2009. Current estimates of finishing 1000 by mid 2010, and 9000 more by the end of that year fit within the exponential growth curve. As MacArthur points out, most of these sequencing services will likely be purchased by researchers in genomic and cancer studies. So the demand is also there.

How can CG scale so quickly? By remaining inflexible but efficient. Their process doesn’t rely on making huge improvements in sequencing technology. Or finding a new sequencing technique. It comes down to streamlining the process. Stick to one task, human genome sequencing, miniaturize whenever possible, fewer reagents means lower costs, and build build build. You can bet a huge portion of that $45 million is going to expanding their facilities in Mountain View.

Who provides the cheap genomes is probably less important than the change it will create. While scientific research will undoubtedly benefit first, the public at large will likely become a dominant consumer. Genetic information is on the journey to becoming one of the most important sets of data someone can know about themselves, with insights into disease, aptitudes, and longevity. Give us the chance for cheap access to that info and you’ll never run out of customers. Just a little while longer, it’s bound to happen.