Personal Genome Machines and growing gene sequencing by 25 times into a $100 billion a year industry

The Personal Genome Machine (PGM), the silicon-based device is the smallest and cheapest DNA decoder ever to hit the market. It can read 10 million letters of genetic code, with a high degree of accuracy, in just two hours. Unlike existing DNA scanners the size of mainframes and servers, it fits on a tabletop and sells for only $50,000, one-tenth the price of machines already out there.

His current startup, Ion Torrent, created the PGM just three years after Rothberg dreamed up the idea; a soft launch took place Dec. 14. The device has at least one big believer: Life Technologies, a $3 billion (sales) lab equipment maker, was so impressed that it bought his company for $375 million (plus milestones worth another $350 million or so) this fall, before the machine was done

Despite the steady drone of genetics studies in top medical journals, most scientists still don’t have access to DNA-decoding technology. Existing sequencers are like computer mainframes in the 1960s. They cost $600,000, take a week to yield results and need scads of technicians to run them. Half of the 1,400 DNA-sequencing machines in the world reside at just 20 big academic and government research centers.

Rothberg’s machine could change all that through speed of analysis and wider dissemination of tools. He says that only 400 labs are currently doing this sort of genomics, and he wants the PGM to open the field to 4,000 research groups that are not participating.

Right now the market for DNA sequencing hardware is $1.5 billion, mostly through sales to scientists. Medical gene tests and other molecular diagnostics generate another $2.6 billion.

How do you get from a $4 billion business to a $100 billion one? Rothberg’s answer is that, like radiology, there will be armies of trained physicians using specialized machines, as gene scanning hits the medical mainstream; that gets expensive very quickly. Here are the assumptions–admittedly very speculative–for what could happen in 20 years:

– Cancer is the biggest near-term market. Today treating a cancer patient costs hundreds of thousands, sometimes millions, of dollars. Some breast cancer patients already get a specialized gene test to help determine what treatment is right for them. If similar gene tests become routine for all 4 million cancer patients in the U.S. and Europe, as many oncologists expect, this alone could be a $20 billion market. Some patients might be sequenced multiple times as a tumor spreads and mutates. Total so far: $40 billion.

– Another $10 billion market could come in scanning kids and adults with unexplained symptoms for rare inherited diseases or other genetic risk factors. A whole new medical specialty may sprout up to interpret the complicated data produced by gene scans and tell patients what it all means, another $10 billion. Now you’re up to $60 billion.

– Tracking the movement of infections in hospitals, airports and public places like shopping malls to identify microbes and prevent them from becoming epidemics–that has to be a $10 billion industry. Running tab: $70 billion.

– If costs drop low enough, affluent people may start getting their genomes–or those of their newborn children–on a thumb drive as a precautionary measure. If 50 million people a year do this at a cost of $2,000 per test, that would bring the tally to $80 billion.

– The market for sequencing genes in agriculture, resulting in better mate selection in the livestock industry and for optimal seed selection to get maximum yields is, perhaps, a $5 billion market. Total thus far: $85 billion.

– Numerous other industrial applications, such as searching for designer biofuels, designing new enzymes for laundry detergent–and doing other things that haven’t even been imagined yet could easily add another $15 billion over time. Et voilà: $100 billion.

PGM is the first DNA decoder to rely on silicon transistors, it should improve performance very quickly. An upgrade, due out in the first half of 2011, will be ten times as powerful as the original. It will data mine 200 or more genes at a time, and that’s what oncologists need right now to make diagnoses and pick drugs.

By 2012 the PGM will decode in two hours all 20,000 human genes that code for proteins. (This is roughly 3% of all DNA and will still be far behind Illumina, which can do all the DNA twice.) Eventually, he hopes to create a machine the size of an iPad. “There isn’t a technology that we will not pass in a very short period of time,” he says. “It doesn’t matter how far ahead they are.”

At the heart of the personal genome machine is a silicon chip with 21 million transistors on it–the equivalent of a desktop computer circa 1995. On top of the chip is a tiny channel the width of two human hairs into which DNA is fed. Each DNA molecule in the body contains two long strands of chemical letters, or bases–A,T, C and G–that come together like a twisted ladder (a.k.a. the double helix). The machine takes a single DNA strand and uses an enzyme to attach bases to it. Every time the enzyme connects two bases–an A to a T or a C to a G–an electrically charged ion is released and detected by sensors on the machine. By exposing the DNA sample to only one letter at the time, the machine can reconstruct the entire sequence.

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