2. New genetic technologies will brave the valley of death. DNA sequencing is getting cheaper and making its way into hospitals. Some cancer patients (notably Christopher Hitchens and Steve Jobs) have used genetic tests to try and pick the right drugs for their tumors. But right now using DNA sequencing on patients is not making much money for companies that make DNA sequencers, such as market leader Illumina, and big funders like the National Institutes of Health are tightening their belts. The result is that the two publicly traded genomics upstarts, Pacific Biosciences of California and Complete Genomics, are trading below or near the value of the cash they have on hand.
The beneficiary so far has been Ion Torrent, the new sequencer maker bought by lab giant Life Technologies in 2010. It has been able to build a user base with its sequencing technology, an it could use this bulwark to launch a bigger attack on Illumina. The science will continue to advance. Whether its these DNA sequencer companies or next generation efforts like Foundation Medicine, the Google Ventures-backed cancer sequencing startup, is anybody’s guess.