Next Generation Sequencing (NGS) Market Assessment Trends (2020-2026)

Next Generation Sequencing (NGS)* has transformed the life sciences and diagnostics landscapes. This technology is used for applications including human whole genome sequencing (WGS), whole exome sequencing (WES), targeted sequencing using panels of a few-to-thousands of genes, and expression profiling (i.e., RNA-Seq). We expect the recent market mid-single digit growth in 2022 and 2023 to slightly improve in 2024 (10% growth), despite macro headwinds. In 2025 and 2026, we expect that the market will resume its mid-teen market growth, driven in large part by continued double digit growth across most clinical applications (all outside of NIPT).

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The 9th edition of this report was published to provide granularity on market segments now that COVID sequencing is largely behind us (<$50M in 2023), with limited future testing expected:

• While novel players will gain market share traction across customer types for a broad range of applications, Illumina will maintain its clear leadership position, most notably in clinical oncology, as their instruments start to be used across the patient journey (including multiple cancer monitoring applications [e.g., MRD, recurrence monitoring] and early cancer detection) in addition to the penetration of therapy selection (now moving from metastatic to earlier-stage cancer patients [stage IIB and stage III])
• Oxford Nanopore and PacBio will remain neck-and-neck, with Oxford nanopore maintaining a narrow revenue lead in 2026, with both benefiting from the increase availability of rich genomes (i.e., including methylation analysis) and datasets (and underlying utility derived from these databases)
• In the clinic, reimbursements coming online across a broad range of applications (e.g., MRD, clinical WGS) and piecemeal over time will support sustained strong market growth well-beyond the forecast period (clinical TAM still <<10% penetrated)

This report assesses the NGS manufacturer market (i.e., excluding NGS service revenues [e.g., GH, NTRA]) across six segments:

• Company*: Illumina, Thermo Fisher (Ion Torrent), Oxford Nanopore, Pacific Biosciences, Roche, and others*
• Product Type: Instruments (including software) and Reagents (including consumables)
• Customer: Academic Basic Research, Population Studies, Biopharma R&D, Biopharma Clinical Trials, Liquid Biopsy Clinical Trials, Clinical Diagnostics (Oncology), Clinical Diagnostics (NIPT), Clinical Diagnostics (All other), Liquid Biopsy (Dx), Applied Markets, Industry, Epidemiology (including and primarily SARS-CoV-2)
• Application: human WGS, WES, Targeted Resequencing, RNA-Seq, Other
• Therapeutic Area: Genomics, Oncology, Infectious Diseases, Method Development, and Others
• Geography: U.S., Europe, China, Asia/Pacific (APAC), and Rest of the world (RoW)

For each segment, we provide the market size annually from 2020 to 2026, and commentary on key growth drivers and moderators. At a high level; these factors include:

• Accelerating adoption in clinical settings (both in clinical trial and routine testing) now representing more than half of the market, especially for clinical oncology where liquid biopsies are utilized across the patient journey from early detection (e.g., GRAIL, Guardant Health) to therapy selection (e.g., Guardant Health, Foundation Medicine), or therapy monitoring and cancer recurrence testing (e.g., Natera, Guardant Health); many of these tests have now received FDA approval
• Increased reagent usage on an expanding instrument installed base across applications, especially for higher throughput instruments (e.g., NovaSeq X, PromethION 48)
• Increased usage for new scientific applications built upon sequencing detection (e.g., [single cell] RNA-Seq, ATAC-Seq, methylation, spatial profiling on 10X Genomics Visium*)
• Overall, we believe that a silver lining of the COVID-19 pandemic will be the acceleration of NGS adoption for personalized medicine purposes, beyond oncology applications (e.g., infectious diseases, reproductive / women’s health) as tools and diagnostics took center stage in the public discourse in 2020NGS-based SARS-CoV-2 testing won’t contribute meaningfully to this market in the long term (peaking at ~8% of the manufacturer market in 2021 [~$430M], and collapsing to <2% in 2023 [~$50M]), contributing to the 2023 NGS headwinds
• Increasing number of competitors with differentiated offerings (e.g., Oxford Nanopore, Element Bio)

Key factors moderating growth include:

• Excess capacity, with some installed (primarily low throughput) instruments operating at only 20-30% of capacity, less in some cases
• Pricing pressure has decreased cost per Gb, moderating overall revenue growth, due to competitive pressure announcements (e.g., Ultima Genomics, Element, MGI), and the availability of more affordable instrument options (e.g., Singular G4 on reagent rental model)
• Reimbursement uncertainty and pushback in clinical settings (due in part to lack of education even in some cases where tests are covered by insurance companies) limiting access to the vast majority of clinical samples in the U.S.
• Out-of-pocket pay for some tests in China limiting adoption
• Continued bioinformatics and data analysis challenges, especially for structural variants or translational and clinical applications (e.g., clinical variant interpretation), gating access to most potentially addressable samples
• Moderate growth in research funding in established markets
• Regulatory pressure (e.g., IVDR, LDT regulation) that may create short term headwinds in decentralized adoption, that may reverse in the long term as manufacturers double down on IVD solutions that facilitate decentralized adoption (when available)

We also review interesting market trends, such as:

• Increased use of native long read (NLR) technologies that may help generate data / information on structural variants (and in turn additional use of NLR platforms) that offer a richer set of genomics information (e.g., methylation) beyond “simply” long reads
• Increased number (and scale) of population sequencing programs (e.g., Korea planning to sequence 1M genomes by 2029), with shift to NLR platforms offsetting continued pricing decline of price per genome (theoretical PromethION WGS price: $345 / genome)
• Diversification of sequencing options driven by the launch of multiple new platforms, with more to come
• Consolidation of applications on increasingly differentiated platforms, based on their workflow, turnaround time and cost (e.g., human WGS on NovaSeq, field-based pathogen sequencing on the MinION)
• Simplification of the overall workflow with the launch of more automated (e.g., Genexus) or flexible (e.g., Singular G4) instruments or (third party) automated sample preparation instruments, saving time, and increasing reproducibility
• Continued decentralization of sequencing runs driven by the availability of low cost desktop sequencers (e.g., MiSeq), but in turn a centralization of sequencing volumes as high throughput platforms can cost-effectively run 10,000’s of samplesoNatera experienced explosive growth of its Signatera franchise, growing yearly from 3K (2019), 18K (2020), 76K (2021), 190K+ (2022) and 81K (Q3 2023 alone) samples; as a tumor-informed test, all of these assay require baselining using NGS
• Increasing use of service providers, particularly in the U.S., offering an alternative to in-house platform adoption, as many customers don’t have the budget for large capital expenditures, and many such service providers offer unique applications
• Increasing number of players participating in this fast-growing market, typically offering front end (sample preparation) or backend (bioinformatics) solutions, with most targeting (clinical) oncology
• Increasing competitive intensity on dimensions others than cost per base pair (e.g., workflow, portability, clinical content)

Overall, our analyses suggest that over the next 3 years, the spotlight will be on four NGS manufacturers:

• Illumina, given its high reliability and the existence of an entire ecosystem to support “Illumina sequencing”, the company will remain dominant, especially given the Nova X launch that is expected to gain share in the largest (and most attractive) high throughput segment
• Oxford Nanopore and PacBio, given the value of long reads, form factor, and additional information “for free” (e.g., methylation)
• MGI / Complete Genomics (in the U.S.), given its right to play with a complete portfolio of solutions akin to Illumina in term of breath
• In addition, stakeholders will keep a close look on short read entrants (e.g., Element, Singular, Ultima) trying to articulate their value proposition, demonstrate platform robustness and execute commercially