The Impact of Cheap Genome Sequencing

July 23, 2015

The Impact of Cheap Genome Sequencing Photo

In 1990, the U.S. National Institutes of Health (NIH) and Department of Energy (DOE) launched an ambitious $3 billion venture to sequence 95% of the DNA in human cells in 15 years. Termed the Human Genome Project, the labs of the NIH and DOE joined with scientists from 20 institutions across the globe and completed the project ahead of schedule in 2003, just 13 years after they began. At that time the International Human Genome Sequencing Consortium officially announced the sequencing had occurred according to the guidelines of the original Human Genome Project, with 99.99% accuracy.

Since then, the cost of sequencing whole genomes has plummeted, as the chart above demonstrates. Currently, the age of the sub-$1,000 genome is upon us—presenting a tremendous opportunity for investors in life science companies. For example, Illumina, a life science tools developer and manufacturer, announced in January 2014 that it had developed a machine capable of sequencing the genetic code of a human cell for $1,000 – assuming scale[1].

The trend’s ramifications on medical research are impossible to ignore and stand to benefit investors in the space. Consider the impact a dollar of research funding had back in 2007 versus today. Targeted treatments for a host of conditions maybe on the horizon including heart disease, cancer and diabetes, individualized preventative medicine, molecular analysis to diagnosis disease and gene therapies to treat rare single gene disorders. Demand for the new research and drugs are at new highs. Robert W. Doms, MD, PhD, Chair, Department of Pathology and Laboratory Medicine at the Children’s Hospital of Philadelphia, noted “[Genome research] is going to change the face of medicine. For the first time we can really peer into somebody’s cells, peer into their DNA, and understand why they are suffering.”

Key takeaway: Whether the cost of sequencing a human genome is $1,000 or closer to $4,000, as reported by the NIH, is much less relevant than the fact that the cost has fallen exponentially over the past 10 years and will likely continue to fall in the future. As the price continues to fall, an ever increasing number of people will have their genomes sequenced and the potential for medical breakthroughs will only grow.

The reduced costs continue to bring us closer to the promise of personalized medicine. Some of the areas of immediate impact on our lives are the ability to 1) Determine one’s likelihood of contracting one disease or another, 2) Ascertain whether an individual is a carrier of a genetic disease, 3) Identify the causes of rare diseases, and 4) Establish targeted treatments.

From an investment standpoint, the opportunity has never been more exciting with the ability to develop targeted drugs with a higher probability of success with fewer dollars invested, a more rapid commercialization of high impact tests on the diagnostic side and the development of curative devices enabled by new biological understanding. These advances should continue to push life sciences forward and contribute to its attractiveness as an investment area for some time to come, allowing investors to earn attractive returns by funding research targeted at previously untreatable diseases.

[1] In order to bring costs down to $1,000, the Illumina machine would need to be used to sequence 18,000 human genomes annually.

Tags: Chart of the Week | Life Sciences | Genome Sequencing | Human Genome Project

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