Thank you for the great overview. Is there a chance sequencing companies make their data inaccessible in the raw format so Sophia no longer works and a lab can only use dedicated software?
Also curious if you see Sophia as a precision health/medicine play on individual bio marker tracking and analysis? If so, have you looked at Diaceutics? Curious on your thoughts, thanks.
I think fortunately the odds of sequencing companies doing that aren't super high. Illumina would be the biggest risk here given its market share, but a move like that would immediately attract more anti-trust scrutiny. Element/Ultima are so new that I'm not sure they have an interest in slowing down sales processes by saying you must use our software. Competing against Illumina is hard enough as it is! BGI Genomics making that move would arouse suspicion given it's based in China.
On Diaceutics - hadn't come across them before so thanks for flagging. They're likely competitive with Sophia on the biopharma side, but I'm less excited about that part of the business. The near-term bet for Soph is that a lot of revenue from already signed hospital customers will come online in Q4/Q1, and that that revenue is sticky/leaves a good amount of room for expansion.
A similar question as above. Do the sequencing cmopanies have software capabilities? Wouldn’t it be in their best interest to include software with their core offerings? It seems possible they might even offer the software for free to close a large contract. Do you think this is the case? Will Illumina and other sequencers become more of a threat to Sophia?
Yes, a lot of these sequencing companies do have software capabilities, so it's a risk to be aware of. The challenge for Illumina is that historically they've attracted a lot of anti-trust scrutiny (and loss of investor confidence) with both their PacBio and Grail acquisition attempts. Consequently, I think mgmt is unlikely to do anything with the company's software offerings that the FTC might object to. While these sequencing companies have software, they don't offer any software tools with the pitch: "We'll analyze your liquid biopsy/MRD results and tell you if a patient has cancer/a patient's cancer has returned" There's good reason for this: if you're Natera and Illumina starts offering MRD solutions your business is going to be threatened, so you'll probably try and look elsewhere for a sequencing provider. Illumina/Ultima/Element/PacBio can't offer solutions that compete with Sophia's unless they're willing to piss off a bunch of existing (and important!) customers.
Thank you for the great overview. Is there a chance sequencing companies make their data inaccessible in the raw format so Sophia no longer works and a lab can only use dedicated software?
Also curious if you see Sophia as a precision health/medicine play on individual bio marker tracking and analysis? If so, have you looked at Diaceutics? Curious on your thoughts, thanks.
I think fortunately the odds of sequencing companies doing that aren't super high. Illumina would be the biggest risk here given its market share, but a move like that would immediately attract more anti-trust scrutiny. Element/Ultima are so new that I'm not sure they have an interest in slowing down sales processes by saying you must use our software. Competing against Illumina is hard enough as it is! BGI Genomics making that move would arouse suspicion given it's based in China.
On Diaceutics - hadn't come across them before so thanks for flagging. They're likely competitive with Sophia on the biopharma side, but I'm less excited about that part of the business. The near-term bet for Soph is that a lot of revenue from already signed hospital customers will come online in Q4/Q1, and that that revenue is sticky/leaves a good amount of room for expansion.
A similar question as above. Do the sequencing cmopanies have software capabilities? Wouldn’t it be in their best interest to include software with their core offerings? It seems possible they might even offer the software for free to close a large contract. Do you think this is the case? Will Illumina and other sequencers become more of a threat to Sophia?
Yes, a lot of these sequencing companies do have software capabilities, so it's a risk to be aware of. The challenge for Illumina is that historically they've attracted a lot of anti-trust scrutiny (and loss of investor confidence) with both their PacBio and Grail acquisition attempts. Consequently, I think mgmt is unlikely to do anything with the company's software offerings that the FTC might object to. While these sequencing companies have software, they don't offer any software tools with the pitch: "We'll analyze your liquid biopsy/MRD results and tell you if a patient has cancer/a patient's cancer has returned" There's good reason for this: if you're Natera and Illumina starts offering MRD solutions your business is going to be threatened, so you'll probably try and look elsewhere for a sequencing provider. Illumina/Ultima/Element/PacBio can't offer solutions that compete with Sophia's unless they're willing to piss off a bunch of existing (and important!) customers.