January 21, 2012

How large a market for prenatal diagnosis by sequencing?

Prenatal diagnosis is one of the most interesting clinical applications of sequencing. The idea behind prenatal diagnosis is that potential disorders that a foetus may have are detected before birth, so that the parents can decide what to do about it. A widespread and ancient technology is ultrasound. An alternative method involves sampling of the amniotic fluid surrounding the foetus with a large needle (amniocentesis), which causes a miscarriage in 1% of cases. More recently genetic screening technologies, including sequencing, have entered the market.

The most prominent company offering prenatal diagnosis by screening is Sequenom. This week, Sequenom announced a public offering of shares valued in excess of $50m. The aim is to finance further expansion of its business, including sales of its MaterniT21 prenatal test.

The principle behind the MaterniT21 test is that some of the DNA in a pregnant woman's blood is of foetal origin. By sequencing that DNA, it is in principle possible to reconstruct most of the genotype of the foetus, and to detect most genetic disorders from the 10th week of pregnancy onwards- earlier than with equivalent tests.

Sequenom's MaterniT21 test currently only returns information on whether there is an third copy of chromosome 21, which causes Down syndrome. If the test returns a positive result, the parents can then decide which actions to take, which could include termination of the pregnancy.

Sequenom is reported to charge $2,700 per test to insurance companies, which is likely to be the cost to them many times over. Therefore there should be plenty of room for prices to come down once there is more competition. That there will be more competition is likely. In the United States, Verinata, which raised $47m in autumn 2011, and TrovaGene are also working on technology based on sequencing foetal DNA from the mother's blood. In Germany, LifeCodexx is developing a similar test, licencing technology from Sequenom.

Even at lower prices, which will probably be paid for by insurers anyway, the big question is how many couples are willing to purchase a test. Of 4.1 million births each year in the US, 750,000 (18%) are judged to be at a high risk of Down syndrome or other chromosomal abnormalities, either because the mother is over 35 years old or because there is a history of such disorders in the family.

It is likely that in the future the tests of Sequenom and its competitors will include other disorders such as cystic fibrosis, muscular dystrophy, anaemia, neuropsychiatric conditions like autism, and beta-thalassaemia. This could widen their appeal to parents that are not in the 18% currently judged as high risk. If prices come down sufficiently, I don't see a reason why sequencing-based tests for pregnant women could not be as prevalent as ultrasound is today.

At 4.1 million births in the US alone each year, and even if the price of tests decreases to a fraction of what they are now, it could well be a multi-billion dollar market.

Time to buy some of those new Sequenom shares?


  1. Thanks for the post Art - This a fascinating field.

    Sequenom's share might spike for a while but there will be some big challenges ahead. There's some controversy regarding the accuracy of their test for young gestational ages (important if you need to make a decision about whether to keep the fetus) and they are going to get some really stiff competition from two other groups worth mentioning - Aria Diagnostics (developing a much cheaper test) and Natera (formerly gene security network) a much more accurate test for young fetuses (especially with respect to specificity).

    1. Hi, thank you for pointing out Aria and Natera. It'll be interesting to see how far they can go without getting sued for infringing on Sequenom's patent, which seems quite broad.

      As for Sequenom's share price, as can be expected it went down once they announced the public offering last week (from $4.61 to $4.35), and it hasn't recovered since. And it's still a far cry from its 10-year peak of $27.74 in September 2008.

  2. can this test prognose the diseases which include microdeletions at sub telomeric level?For exampkle in case of mental idiopathic retardation where the deletions are at sub telomeric regions.

    1. As far as I know, Sequenom's MaterniT21 only tests for trisomy 21, i.e. the presence of an additional copy of chromosome 21. Which doesn't mean that it couldn't in principle screen for other disorders as well.

  3. This comment has been removed by a blog administrator.