Good afternoon, everybody in the room, and all of you online. Welcome to our first Capital Markets Day, so please be gentle with us. I'm gonna talk and set the stage for today's Capital Markets Day about vision and growth. As I hope most of you know, the company's goal is to enable the analysis of any living thing by anyone, anywhere. I want to talk about a brief overview of the company and our history, our journey, and our future, setting the stage for the presentations today. We are a single molecule sensing platform company. We're focused on DNA, RNA analysis, sequencing, genomic analysis. At the heart of everything we do is innovation, and you'll hear from Rosemary later. The life science research tools market, which I will abbreviate to research markets, is a $6.2 billion market, growing at 15%-18% per annum.
We're growing much faster than that. The potential for applied markets runs into in excess of $150 billion. In the second part of today, we'll be talking about how we are uniquely positioned to go after those applied market industrial and applied market clinical applications. We've been selling products since 2015. We're in over 120 countries, and we completed our factory, where we make our consumables, flow cells, and kits in 2018, and it has scalability built in to take us through, based on our long-range planning, to 2027. We've got 1,200, not 120 people. I remember those days. I knew everybody's name back then. The leadership, post-IPO, two years, and prior to that, has been together for over 15 years. Same strong management.
We have been, let's get my first football analogy in, blending that experience with youth from commercial leadership, from our competitors, as we really push through on what are our S2 and S3 customer types, which I should talk a little bit more about later. In numbers today, our 12-months year-on-year revenues are GBP 162.2 million. Last four years, that's 46% compound annual growth. 75% of our revenues are from consumables, so this is repeat consumable sales. We have moved our margins since October 2021 IPO, from 42% to 57.6%. We have an evergreen IP portfolio, and I'll explain what I mean by that in a minute, and 8,800 publications.
These publications are critically important because we are, for the first time ever, reading native DNA, not making copies, which is how the current sequencing market sits. And they really drive use cases, which drives revenues and commercial growth. Our medium to long-term targets are to continue, as we set out at IPO, greater than 30% underlying growth. We expect, in the medium to long term, 10%-20% at least, to be clinical or applied industrial. We're on target to hit our 65% margin growth in the medium term and adjusted EBITDA breakeven in 2026. These growth trajectories and margin gains are driven by innovation, and Rosemary will talk through the innovation since IPO and what's coming next, and expanding our commercial operations and our manufacturing. Scalability, innovation in manufacturing, continuous improvements, and automation.
So, I could spend the whole of my session telling you about the key moments in the company's history. I'm just gonna pick on two. We were spun out of Oxford in 2005, but we very quickly partnered with Harvard, University of California, Santa Cruz, UMass, Texas A&M. That's kind of the five founding godfathers of nanopore sequencing, nanopore sensing. Today, that policy has led us to 34 license agreements, and it underpins what I describe as our evergreen IP portfolio. In 2015, we licensed from VIB in Belgium, a nanopore CsgG, which is central and was in our products from 2017 onwards, as the sensing element for all of our platforms. So that gives us a 20-year IP lifetime from 2015. The other thing I want to just mention in this journey is the application-specific integrated circuit, invented from the ground up in academia.
Even today, they still use one single channel. In 2012, we developed our first ASIC for MinION, 512 channels. Within three years, on that same silicon footprint, so your cost of goods is fixed, we produced our PromethION flow cell, which is six times the output. So we are leveraging Moore's Law to continue to get higher outputs without impacting margins. Future-looking, we have a voltage chip, which will give us 10,000-100,000 channels, and ultimately lead to a one hour, $10 genome. Now, that is in research, so don't ask me when that's gonna happen. It's three to five years out. So DNA, RNA, just very quickly, it's the source code of all living systems, which is why it speaks to our vision of enabling the analysis of anything by anyone, anywhere.
It comes in a variety of sizes, from tens of thousands of bases for viruses, millions for bacterial pathogens like E. coli, Salmonella. As we know, human is 3 billion, less than 1% variation in all of us in that 3 billion, and then crops that can be tens of thousands of bases and tens of billions of bases. What is it? What is our source code? How does it work? Is it responding or changing to treatment? Why do some drugs work on us? Why don't they work on others? Infectious diseases, what you might do with genomics in a pandemic, I think you all understand that. We're very interested in DNA and RNA. Rosemary will describe how our technology works. I just want to tell you the key features that distinguish us from optical-based systems, all optical-based systems. We read the native DNA.
That is biologically significant. We are transitioning, for those of you who are old enough, from black and white TV to high-definition color in that biology, and you'll hear about that later. We can sequence any fragment length. If your biology is short, circulating tumor DNA, or you want to sequence very complex genomes or chromosomes, long and ultra-long will allow you to do that. And it produces a lot of genetics that you cannot see today, that is often referred to as the dark genome. Real-time data generation, affordable, accessible, no CapEx, distributed, plug-and-play sequencing. That's what underpins the highly differentiated nature of our platform. What does that mean? Richer insights. 34%, so 1/3 of all disease-causing variation, is more than one single point mutation. So long reads really change that game, and we start to look at the dark genome. Fast time to result.
This was a cancer application, accessible and affordable. Short tandem repeats can impact things like Fragile X syndrome, Huntington's, and often these patients have multiple diseases. And with one MinION Nanopore, you can unpick these complex diseases, and you'll hear more about that from Danny Miller in the panel today. So our platforms, just like DNA, come in a variety of shapes and sizes, small, right through to high throughput, high-end scale platforms. Each of these price ranges here are highly disruptive. As it's an OpEx model, there is no capital requirement. Anybody who has a PCR lab can run these platforms. You don't need millions of dollars to buy the equipment. You don't need multi-million-dollar infrastructures to run them. Our business model is to seed the market with MinION. And I-- if you haven't had a look downstairs, our G en 2 MinION was down there, fused to an iPad.
It's very cool, if you haven't seen it. Over 80% of those users click and collect. We have no interaction with them. So it's almost like selling software to them. They then produce these publications. That then drives commercial adoption. At the other end of the scale, with the GridION, PromethION Fleet, P24, P2, P24, and P48, these are higher throughput customers, and they are sold to in a more traditional way. So those starter packs come in, start at $50,000 for a GridION, go up to $300,000 for a P48, and that is a traditional field-based account management support.
That's where we have been adding commercial people from the likes of Illumina and 10x Genomics to really help drive that S2, S3 customer base, 'cause that's where our revenues in the short term will give us that 30% year-on-year growth. Who are our customers? We have our genomic explorers, and in each case, you've got to see the full four-year growth in these customers. These people spend up to $25,000 with a mean spend of about $6,000. That's about, I mean, I'm not gonna give you forensic numbers. That's up for Tim, for you. There's about 6,000 customers in this segment. Here, mid-range labs, using the features and benefits that we provide, they spend $25,000-$250,000. These are GridION users, primarily. Mean spend, $60,000. Growth in that segment, 39%.
PromethION, P24, P48, this is the segment and some of these who will really drive the short to medium-term revenues. We have almost 100 customers here. They spend over $250,000.... and their mean spend is $600,000. Those are approximate numbers. It's easy for me, $6,000-$ 60,000-$ 600,000. Since IPO, our growth year-on-year has been 32%. As I've said, our margins moved from 42% to 57.6%. We've acquired 1,000 new customers. We have a strong balance sheet. That growth is driven by P2, our Q20+ chemistry, Dorado for accelerated base calling, and Short F ragment M ode, because liquid biopsy and circulating tumor DNA is something that we think will be very important as an application. We've doubled our commercial team.
We continue to blend people like Rich, who will be talking later today, joined from Illumina seven or eight years ago, with new people who are joining from our competitors. We are expanding our global footprint, and in the second part of today, we'll talk a lot about collaborations and applied markets and industrial applications. So in terms of accelerating commercial execution in life science research tools, as I've said, we brought in talent from competition. You can see we are starting to see the early fruits of that investment with strong growth in America, in Europe, and even China, with the slowdown. So that is coming together. Our medium range, greater than 65% margin targets, we're very confident because there's still a huge amount of innovation that we don't really properly talk about enough in flow cell manufacturing, coupled with our continuous improvements.
As I've said, we have the capabilities with automation to scale this business to meet our long-range plan, and we are really focused on quality in the factory as we start to think about applied market applications. So I could also spend a whole session talking about landmark key publications. These are just some of them, and if you zoom out, what we see thematically coming at us is that with the features and benefits of native DNA, high definition, full color, long reads, short reads, ultra-long reads in human cancer and infectious disease, these are the target areas that drive today's revenue in the short term. But these are also applied market opportunities that run into greater than $150 billion that we will also go after. So it's a dual approach, short term and medium to long term.
That market is $6.2 billion, but it's this one that we're really interested in, and oncology alone, cancer applications. The number one driver in cancer is methylation. With native DNA sequencing, we can read the whole methylome. We do not lose that signal and then have to do chemical manipulation to try and back calculate it. So we believe with methylation, native DNA, and long fragments, we will have a very important part to play in oncology applications, in human genetics, in infectious disease. And Mark Miller from bioMérieux is here today, and we announced strengthening of our relationship with bioMérieux. But do not underestimate the applied opportunities in biopharma, in vet and ag, and in food.
These are underperforming, unmet needs because you do not have small, cheap, affordable, accessible, real-time streaming of data, and that's what will transform these markets, and Lou will talk about the opportunities there. So in my final few moments, I just want to kind of actually take you back to 2004. I come from a blood glucose point of care medical diagnostic background. We were told it was not possible for poor patients at home to be able to get clinical accuracy on a handheld home device. But we disrupted that market, and MediSense was acquired by Abbott for nearly $900 million. I spent seven years at Abbott Diagnostics. When I looked at Hagan Bayley's single- molecule sensing platform, I could see how those 14 years at MediSense that I had done, we could make small, portable, handheld sequencers that would allow live data streaming.
And if you think about the computer revolution, we went from mainframe to desktop to handheld. It was the distributed nature of the information at your fingertips that radically transformed and catalyzed the information age. In exactly the same way, genomics has been forever in a mainframe moment. You need millions of dollars, you need hundreds of million-dollar infrastructure, and it's in large, centralized facilities. We are catalyzing the transition from mainframe to desktop to handheld with our portfolio of products, and you will hear how that is disruptive and groundbreaking in multiple application markets in the second part of today. We're very excited about that. We also, as happened with the computer industry, have thought very carefully about how we can enable our customers to innovate on this platform. We cannot possibly get our arms around the huge breadth, depth, and diversity of applications in these applied markets.
John will walk you through our partnership programs, such that we have open source developer licenses, so that customers can innovate for these applied industrial markets. I want to emphasize, it's already happening. What is really exciting and interesting, since we launched our Q20+ chemistry last March, the number of applications and interest in applied market applications is really ramping up, and we're very excited about that. We know that we are uniquely positioned, whether it's time to result, whether it's unique native DNA in cancer applications or infectious disease time to result, we have a value proposition that highly differentiates us from the rest of the market. This morning, we announced our collaboration with Mayo Clinic. I hope you all know who the Mayo Clinic is, and that's to look at cancer applications.
We've started with a couple, and we'll talk more on that as those programs progress. We've strengthened our relationship with bioMérieux in the infectious disease side. As I said, Mark Miller's here, and he will be on the panel, so he'll talk more about that. This slide I only saw 10 minutes ago. I'm gonna give it a go. Key takeaways. The applied market opportunity runs into $150 billion. We believe, and from the outset, when I set this company up, that you were never going to get a mainframe to be in common use in clinic. I know that because I spent 14 years putting stuff into clinics. Our disruptive technology platform is underpinned by that robust innovation pipeline. I think that iPad with a MinION could have a huge impact in rapid insights, in critical care, in hospital laboratories, in a distributed model.
We have an experienced team, and we are adding fresh talent, which is challenging for us old-timers, but, you know, we are really gearing up, and you'll hear about some of the people who've joined from the competition. Since IPO, we have been hitting our commitments, greater than 30% year-on-year growth. With that, I'm going to hand over to Rosemary. I'm a few minutes over time already, so you have to get us back on track. Thank you, and welcome to today's conference.
Thank you, Gordon. Good afternoon, everyone. Ooh, tough crowd. I've met a lot of you guys. I know you're far chattier than that. So I'm gonna cover how our innovation engine is looking to fuel our growth over the next few years. My name's Rosemary. I've had the privilege of being at this company for ten years as we've taken it from a small start-up in Oxford, with massive, massive ambitions. We're now a global player in the sequencing market, and our ambitions have really not changed, and we continue to deliver on them. I'm representing a very tenacious and tenured innovation team. It's a team who have faced the impossible, a team who've been told it can't be done and delivered it. The innovation team is led by Clive Brown.
We also have a fantastic applications and IP team. We're 445 strong, and we have to cover an enormous amount of ground with that. So we've got a platform to cover. We've got chemistry, engineering, algorithms, software, AI, machine learning, sample prep, automation. It's a lot of ground to cover, and we work incredibly closely with each other to make sure that we're all in tune with each other at all times. We collaborate not only with ourselves, but we collaborate with our academic partners. We collaborate with industry leaders in electronics, people like NVIDIA, people with Apple.
We partner with our developer community, the guys who get that first taste of product as soon as it comes off the factory floor, and also our customers, who give us continuous feedback on what they want to see next and what we should be doing to make their lives easier. So we've created with this a highly differentiated product. So we innovate on six core components. We have a motor protein that ratchets the DNA through the nanopore. We have a nanopore that reads the DNA as it goes through. We have run conditions, be they salt, fuel, software, membranes, base calling algorithms that translate that signal into bases. And then, of course, our underlying platforms are ASICs, of which right now we've got three. We've got a Flongle with 126 channels for small experiments.
MinION, that's been a real workhorse for us with 512 channels, and the PromethION with 2,675. Now, Gordon mentioned about our IP, and we do have an incredibly strong IP position. We get IP from three core areas, our active research collaborations, active internal R&D, and of course, now collaborations with customers and industrial partners. Really important as well is that a lot of companies, they establish their IP just as they get started, and then they kind of think, "Well, we've done this bit, let's get on with making products." That's not the case for Oxford Nanopore, with over 1,000 patents since 2016. So we continue to innovate to make sure that our, our efforts are well rewarded and protected in the long run. So innovation fueling growth.
What are the three things that we really think around growth and innovation? First of all, what we want to do is take our existing technology, and we want to expand or take market share of the existing market. We want to take that technology into new markets, like applied, and clinical, and consumer. And we want to take our platform and create entirely new spaces for it, new applications as we go into multiomics. So be that protein, small molecule sensing, we have the platform that is right for those applications. I'm going to take you through all three of these, starting with the existing market. It's a really exciting time to be in genomics. We're at the cusp of the genomics revolution.
It took us about 100 years to go from DNA discovery to DNA sequencing, then just over 10 years to assemble the first draft human assembly, and then 10 years to scale that from $1 billion a genome to under $1,000. What we're seeing today is the birth of what we call the true whole human or, or true whole genomes, human or other. What's really exciting is that we're starting this era already at scale. With Oxford Nanopore, we're already offering these at between $345 and $690. When we say whole genomes, what do we mean? So there are lots of different variation types in, in the human genome.
Small variants, this is what most of us, when we hear about genetic conditions, most of the information has come from small variants. This is something that's been fantastically well covered by today's technology, SNPs, indels, and they impact things, sickle cell disease, cystic fibrosis. With the birth of long reads, we started to understand a lot more about large and more complex variants. These are structural variants, copy number variants, repeat expansions, and they impact things like Alzheimer's, Parkinson's. And then what we've done is layered on top of that epigenetics, methylation, base modifications, massive drivers in things like oncology. And finally, dark genome, what people used to call junk DNA because we couldn't understand it.
And actually, what we find is if you really look into those places, there are actually medically relevant genes that people have been ignoring for years and years. So what our customers have been telling us now is that you can reveal more biology with our platform, so what we've been missing really matters. And as Gordon says, over 30% of all disease-causing variation is found outside the regions that have been classically looked at. So today's paradigm, today's market, you've heard it before. Devices can be expensive, cost up to $1 million. They come with big service contracts, big commitments on consumables, and in order to run and in order to maintain the price per genome that you can get with large installations, you really need a high-end lab.
So that's created this sort of three different tiers of customers in the market today. Really massive, high-throughput sequencing centers. These have been really pivotal in actually driving a lot of the understanding that we have today. You then have medium-sized users. They operate sequencing routinely. They batch their samples so that they can achieve cost efficiencies. And then you have all of the other biologists who send their samples into these labs to get their answers out. And if you look at it in that respect, it kind of mirrors what we think of S1 on the bottom, S2 and S3 on the top. So that's the actual market that exists today, the biologists without a sequencer, the medium size, and the high-throughput labs.
Gordon talked about disrupting the current market, and if you read, if you read the textbook on disruptive innovation, they talk about really three key pillars: an enabling technology, which is an invention that makes the technology much, much more affordable, more accessible, a differentiated business model, and a coherent value network. Now, I'm going to talk about the technology. I'm going to touch upon the business model and the value network, but that will be expanded by my colleagues later today. So to cover our platform, I'm going to be covering platform, performance, products, our roadmap to applied, and the world beyond DNA and RNA sequencing, and I apologize in advance, I'm going to have to go through some of the slides really quickly, but the good news for you guys is it's PDFed and all available later. All right.
So why are customers choosing Oxford Nanopore today? What is it about our platform that is making it attractive for them? Gordon has just gone through these. So sequencing of any fragment length, direct DNA, RNA sequencing, real-time data generation, scalable formats, cost-effective plug-and-play, and the three key benefits that we see time and time again, every time a publication comes out with Oxford Nanopore's name on it, it's either talking about richer insights, it's talking about fast results, or it's talking, bringing in an element of accessibility. And every publication you see will touch on those. So sequencing DNA of any length, that is from cell-free DNA to ultra-long. So we can do anything from 20 bases to over 4 million. And we enabled this recently in something called Short Fragment Mode, which is a simple button on our software.
You'll, you can see it, below deck, and all you need to do is tell the software to write out reads, which are shorter than 200 bases, and all of those reads start appearing. So no different chemistries, no different instruments needed. It's the same instrument. You click a button on software, and short read is enabled. And it's incredibly important because DNA is not one shape or one size. DNA comes in all shapes and sizes, and so you need to be able to sequence what you've got.... We get more biology from every read, so we get SNPs, indels, structural variation, phasing. And a customer has recently published to say that with a single PromethION flow cell, they were able to achieve SNPs with higher accuracy than short-read sequencing. So we've got very high-performance variation detection.
We are highly accurate and the most comprehensive technique for base modifications. So base modifications come in all shapes, all manner of sizes. So 5m C is what the industry classically uses, but we've got 5hm C, 6 mA, 4 mC in development, and more coming. Most of the market today uses this thing called an EPIC array to measure methylation. The EPIC array only covers 3% of the methylome, so all of the information that we've been gathered at scale is on 3% of the methylation. With Nanopore, you can take that up to 97%, so an enormous amount of new biology to be discovered. Phasing, with long reads, you can phase.
Phasing is really important, so many of you may have heard of trio sequencing, where you sequence mother, father, patient, in order to understand gene function and origin, and you can do this without sequencing trios on Nanopore. And now, all of those previous applications, these are all things that we do with Simplex. Duplex, a lot of people have heard about Duplex. That is really enabling Telomere-to-Telomere assemblies. But what is a Telomere-to-Telomere assembly? Anyone who's read a textbook about the human genome may be familiar with what the chromosomes look like under a microscope. And up until today, when you try to reassemble that, this is the kind of graph that you could generate. So you couldn't actually separate all of the genome out into its individual chromosomes.
And what the Telomere-to-Telomere group have done is develop the tools so that you can do that. And this is with Nanopore only, you have a fully phased chromosome-level assembly, and you can see the 22 plus X and Y chromosome on there with really, really high consensus accuracy, Q42. So again, so in Nanopore, you can see all of the different biology on DNA, but also RNA. We have isoform detection, RNA mods, expression analysis from bulk, single-cell, and spatial. So everything that applies to DNA applies to RNA as well. So that was just... Oh, there we go. So that was sort of two of the main features and how we, how we derive that statement of richer, richer insights. What about real-time data generation? Well, this is fantastic. It gets you faster results. You can track your run live.
Reads are available as soon as they're generated, which means if you're looking for a small amplicon or a small answer, a quick answer, you can do it in as little as five minutes. It also enables adaptive sampling, a unique feature to Oxford Nanopore, where you can target, you can zone in on a region of interest and sequence only that, without any upfront sample preparation. Completely transformative for for a lot of applications. We have scalable formats, from small handheld to high and ultra-high output devices, and we make these really cost-effective. So our flow cells, we sell in order to get really, really attractive prices per gigabase, so you can see PromethION going there from $9 a gigabase to $2 a gigabase, depending on the output that the users are getting. And the sequencers themselves, they're all part of starter packs.
So MinION starting from $1,000. P2 Solo, so that's a device that can run human genomes, $10,500. You have the mid-scale sequencers, so the GridION and the P2 Integrated, and of course, the higher throughput sequencers, the P24 and the P48. These are incredibly competitive devices out there on the market, and of course, our commercial team enjoys selling them. Another piece that we get constantly asked about is: How much do you have to invest in compute? And the answer is you don't. You have cost-effective... All of the compute can be provided by a laptop for MinION. Anyone who's been downstairs and seen the P2 Solo, that's being run currently off a Mac Pro. So it's not a big investment for the handheld instruments.
But for GridION, you can perfectly keep up with Q20 base calling of five MinION flow cells on a GridION, so the compute is all integrated. On the PromethION, on the A -Series, you can do Q20 base calling of 36 flow cells, so you can absolutely keep up with the P24, and we've got more speed coming, so the P48 will be fully enabled as well. No need to buy extra compute for Nanopore sequencing. We are plug-and-play. As you can see there from a tweet, receiving and setting up a GridION takes minutes. You open the box, plug it in, and you can start your run. We have assisted online or in-person training. Those options are available for customers.
Some are quite happy to train themselves, others really want some help, and we're happy to do that. And then also in development, what we've got is the next generation of onboard troubleshooting. So we want to be able to give our customers a better and better experience when it comes to dealing with any, with any particular issue. For example, here, someone's filling up their hard drive too much, which is a good and a bad problem. So once again, we've got all of our features and benefits covered. You also ask us all the time: How does this compare to the other players in the market? And they are unique features and benefits. They are Nanopore features and benefits. So no one else can sequence any length from short to ultra-long without having to do alternative chemistries or alternative instruments.
No one else is actually sequencing the DNA, RNA, so they cannot get all of the modification information that we can. No one else gets real-time data generation. It's all batch-based, and you have to wait for the end of the run. They don't scale formats very well, so you don't—we, what we tell our customers is, "Please don't compromise your science in order to fit, or in order to fit an instrument." When it comes to cost-effective, no CapEx requirement, we want customers to spend on sequencing, not a sequencer. And of course, because they're plug-and-play solutions, you don't need a team of experts to run experiments. So performance, another very, very constant topic, we must get at least, Charlie must get inundated by emails every other week around this.
We've got a great track record of delivering performance upgrades. You've seen all of our instruments evolve during the years. Always really important to remember, most of our performance upgrades comes from our consumables. So these are our kits, our flow cells. We also ship a lot of upgrades through software. Which basically means that anyone who buys an instrument, that is their instrument for life, and it just keeps getting better. Where are we today? We have duplex reads at 99.9%, simplex read at 99%. Both of those with headroom to improve. We've really taken the accuracy to the next level.
However, it's really important to remember that if you're looking for things like SNPs, which is those three ticks along the top, you can see those SNPs even in our old chemistry, but of course, it gets clearer and clearer as the accuracy goes up. This has left us with an incredibly competitive platform, be it versus short reads or other long reads, simplex and duplex on Q20+ is an incredibly competitive type of data. Again, which is why our customers are getting really excited. When it comes to output, how are we driving the output up for all of our chemistries? We typically run in-house 150 gigabases on native human genome.
Customers are getting over 100 gigabases in field, and we have performance in the pipeline of simplex, of being able to generate over 350 gigabases, with future chemistries, future motors. If you're over 300 gigabases on a PromethION flow cell, your price per genome is under two... is at about $200. And that is how we will continue to drive competitiveness through into our customer hands, is by pushing and continuing to push output and accuracy in our, in our innovation pipeline. Now, we talk a lot about human genomes, and I know this can be quite an, quite a confusing space, but there's lots of ways of sequencing genomes. You can sequence at low coverage, so 1x-10x, so 10 times the depth, and that gives you information like genotyping.
You can do a low-pass genome, so you've read the genome 15x-20 x, and that will give you information like structural variation or methylation. Standard whole genome sequencing is what, what people use routinely. That is the most routine mechanism of sequencing a human genome. So you're gonna read it 30x-40 x over. That's the number of times you're gonna read the genome. And just to walk you through what are the steps there for Oxford Nanopore, it's a DNA extraction step, that's same industry standard, one and a half hours. Size selection, it's optional for us, but you can do it. It's a two-hour step, and library preparation, one hour. So between receiving raw DNA and loading a flow cell, four and a half-hour workflow. Loading a flow cell is about four minutes each. I hope you all get the opportunity to do that downstairs.
Sequencing, if you're doing one genome per flow cell, is a 72-hour run with data streaming during the analysis. You're base calling in real time, and then the final point, really important, you're storing processed reads. If you're storing processed reads, industry-standard file sizes. Customers can store raw data if they want to, and it is an optional, an optional feature of Nanopore. So how about our duplex output? So currently in-house, we're at 50 gigbases of duplex per flow cell, plus 40 gigabases simplex, and remember, simplex is 99% accurate. And the performance that we have in the pipeline, the target we have, is to reach over 100 gigbases of duplex with 50 gigabases simplex output. And we can do that on, on PCR samples, and our teams are working to bridge that gap. So why are customers choosing Nanopore today?
What is it about our products? We started off with very focused core commercial values: accessible, low capital, transparent pricing, upgrades being included, community feedback into the product development. That's what we set out in 2015, what we wanted to do. These are the products that we've been selling up until today. We sell sample prep kits, sequencing as part of devices, as part of starter packs, flow cells, and our software is available to our customers. On the reagent side, we've got a broad range. This is really important. You've got over 8,000 publications because we enable a broad application space. Our kit that's dedicated to best performance is only 60 minutes, but we have rapid kits as well for 10. We are automation ready. So, we have fantastic working relationships with Tecan, Hamilton, Beckman Coulter, Agilent, Opentrons, Eppendorf.
We have an enormous amount of collaboration already with our automation providers so that you can create 192 genomes a week from only one liquid handler, and you can be running four P24s with that. So it's an incredibly efficient way of preparing samples. Devices are available through starter packs, as we've covered before, and flow cells are really priced so that we can enable science at any scale.
Be it if a, if someone in a school or university wants to be running small experiments for under $100 on a Flongle, all the way to people who want to be running human genomes, and you can do that for under $1,000 on a P2 Solo, particularly with the pricing upgrades that we did around London Calling this year. On secondary data analysis, we maintain a sort of an open source style around that. So we've got pipelines that we package up for ease of use. We've been investing a lot into EPI2ME. But really, what's next? What should we be doing next? And the answer is sample to answer. So these are a new product offering that we will be, that we're working on at the moment.
We already have some end-to-end workflows, so we combine our sample prep information with the informatics. And this delivers complete end-to-end workflows for human, telomere to telomere, single cell, plasmid, again, so Rich will touch on these. And it really creates a very secure set of instructions that if a customer follows, they will get an answer. And we also then have sample to answer products. So the first was workflow, was a set of instructions. TurBOT, which we will be showing at ASHG in a couple of weeks, that is a sample to answer product. You load your DNA sample, and it does the DNA extraction, the sample preparation, library preparation. It loads the MinION, and it hits go on the sequencer, so you get an answer out of the other end.
Now, TurBOT is still quite a big, quite a big instrument, and Nanopore is all about disrupting, disrupting genomics, and that is why we have TraxION in the pipeline. So that's a handheld device capable of sample extraction, library prep, sequencing, and data analysis, on a much, much smaller, more portable scale. And you'll have heard Clive talk about this at London Calling this year. Assay Bundle, something we tested during the pandemic with COVID. We sold these as a price per test in our shop. We had kits with primers, we had polymerases in there, library prep reagents, right number of flow cells. We also had an analysis pipeline embedded into GridION. So the customer only had to buy one part number, and everything came ready, and it was really, really great, very popular. It really accelerated things.
This is something we will continue to explore, selling these packages, these test packages, so that customers can get everything in one, in one box. Now, analyzing COVID is quite simple, particularly with all of the work of the ARTIC network. Analyzing human genomes is more complicated, and so we are moving towards third-party integration, so we can go from variant detection to interpretation. We've partnered with people like Geneyx. This is gonna initiate our analysis offering, our more advanced analysis offering. We can already detect variants. We really want to go into interpretation, and in the future, integrations with electronic health record providers. So how do we prepare our products to enter new markets? You've seen and heard the benefits.
In the life science research tools, we move from developer releases to early access releases, to released products. We then have Q-Line, feature-frozen product, software and consumable version support for at least 12 months. And what we're doing here is in ISO 9001, we've got a clear pathway to ISO 13485, and the PromethION Q is also currently in development. So that is how we really go after the applied market. And further to that, we then have our, the applied partner products, which are locked for specific applications. So Q-Line is quite open, and the applied market products for specific applications. So we've got the building blocks in place. We've got a broad range of prep chemistries, scalable sequencers.
We've got the software that's going ready from expert mode to workflow mode, and we've got our EPI2ME analysis with fully integrated third-party interpretation, and our sample to answer products, and John and the team will talk about the partnering that's in active development. So then, to finish on what is beyond DNA and RNA sequencing, well, at the moment, we've got a massive pipeline full of brand-new products, be it MinION Mk1D , TurBOT, TraxION, voltage sensing, but also protein sequencing and liquid biopsy. With our collaborations in our academic space, we found that Nanopore can sequence small biomarkers, microRNA, protein, so the capability of the platform is clearly there. And that is why it is absolutely present on all of our pipelines, and this is the innovation roadmap that you find in any annual report from Oxford Nanopore.
With that, I think I'm ready to hand over to Rich, who's going to talk about our commercial execution.
Thank you. Oh, hi, everybody. So I'm Rich Compton. I'm here to talk about the commercial operation, and I'll focus on life science research market, which generates most of the near-term opportunity for us. So what I want to do today is take you through how really you've seen we offer the best products you can get for a large section in this market, and then how we're also building a best-in-class commercial operation, really to help us get the message out. I'll also chat a little bit about the longer-range opportunities in applied industrial and in diagnostics, but these will be dealt later today by Lou and Emma. So we go back in time.
I joined Nanopore in 2016 to help build the commercial team from scratch, and I first got to know the Nanopore founders while I was at BIOVIA, where I spent 12 years. That company was focused mainly on helping commercial customers, so predominantly pharma, you know, to deploy enterprise software into research, but also into GMP, you know, quality and other regulated environments. And, we were readying that business for sale to Dassault, and I was approached by Illumina, you know, to get over and join their team. And back in 2011, you know, it's easy to forget that Illumina were really in the doldrums at that stage. It was just after the failed Roche takeover, and the EMEA team back then were significantly underperforming. We turned that around.
I led the business through three years of better than 25% compound growth, and we scaled the business from around under $300 million annualized revenue to well over $600 million when I left. And at the end of that period with Illumina, they were pretty much in a monopoly position, but you could see the limitations of the short-read technology. And in late 2015, the Nanopore Exec team gave me a call, and I was really happy to hop over. So focusing on life science research, which is valued in total at about $6 billion. You saw those numbers from Gordon. We'll split that into around $3 billion of foundational research, and then another $3 billion in translational applications.
These workflows in translational are starting to be validated, sample numbers increase, and customers move into more routine use. And the second part of the market's really opening up for, for Nanopore. The presentations that follow will talk about that longer-range market opportunity and full diagnostic and regulated markets, and it's a relatively small proportion of our business today, but there's a real profound opportunity due to the unique capabilities of the platform, which you'll see. So first, we go to the what. You know, what are these customers up to? And we can split that into human and, and non-human use. To start with human, we divide that into two buckets: human genetics, so things like rare and undiagnosed genetic disease, aging, Alzheimer's, autism, ALS. And then the other big bucket is cancer research, which is a really significant and growing area.
On the non-human, you know, we look at everything else, so viruses, bacteria, fungi, animals, plants. The largest sector here, which Gordon already mentioned, is infectious disease, and right across the board, you know, you can see that there are heaps of publications coming out every week. Enormous breadth of use of the technology already. The foundational research, generally, that's funded by universities, by grants from charitable institutions, a lot of government money going in there. There's also a lot of funding from industry. They support academic collaborations, and there's a lot of internal, you know, industrial research and development as well. And as I mentioned, as we move from the left to the right, the methods start to get locked down, and the handle cranking starts, which we love as folk move into routine use. That transition's really good.
You know, these types of users tend to generate three or four times the amount of consumable pull-through per device, you know, compared to folk doing the foundational research. Rosemary's already spoken about the product pathway for these customers, and it's a sector, you know, you can see that we're really taking very seriously indeed. Next is the who. You know, who are these customers? And, you know, customers sit in a variety of places. There are a lot in universities, but also in industrial, pharmaceutical, food, home and personal care, and so on. There's a lot going on in government and public health labs. They're kind of pivoting away at the moment from COVID and into thinking about key areas like pandemic preparedness and biosecurity.
And while all of these customers are important, you know, biopharma probably represents the largest growth opportunity for us right now, right the way from early, you know, fundamental discovery all the way through to manufacturing and, and quality. That's the how. You know, how do we reach these customers? And it really all depends on the type of customer and the application, and we'll optimize our approach to selling and, and support, yeah, based on that. So for the research market on the left, it's really a technical and disruptive sell. We've built our own teams, you know, of sales, marketing, and support, and these folk are really knowledgeable, not just on our platform, but on our customers' applications and the discoveries that we can all make together.
And then in some geographies or some market sectors, it's much better to team up with channel partners. You know, they offer their experience in the local market, local logistics, regional banking systems, and, and so on. And in certain market sectors, we also wanna expand our reach with partners, so we want our direct teams focusing on the really high-value, you know, deals. And, yeah, partnering with Avantor, for instance, with their thousands of employees, is helping us to grow and support our MinION customers. As we move to the right, where the sequencing and the results generated sit in that semi-regulated environment, we have a choice then between our own specialist sales teams and also partnering strategies, and John will be talking about more about that later.
So since IPO, we've doubled the size of the commercial team, and we're being careful to structure that sensibly, you know, to drive growth to the maximum velocity. An important aspect of that is really about regionalization, and in the fourth quarter of 2022, we restructured the global sales and support teams into three regions. It's really to make sure that we're closely aligned with the needs of our users, and while we have still global leadership and centralized strategy for the functions, we've taken significant steps to localize, making sure that we follow up on regional priorities, engage with regional scientific networks, provide local language support, and so on. And at the territory level, there are local account teams.
Yeah, they're getting the message out, winning the deals, and providing application support, and then office-based inside sales, technical support, and then customer service on, on top of that. And a nice example of how we're developing is in United Arab Emirates. You know, the, the team there started really by exclusively supporting the Emirati Genome Program, but now we've got a group of over 20, not only providing support for the Middle East, but also India and, and Africa, too.... We've got a real depth of, of world-class leadership, and you can see some of the bios up here and on our website. But beyond that, you know, the broader teams are also extremely skilled. You know, sales and technical services teams include a lot of PhDs and postdocs who made that transition to come across to the commercial world.
It's a really smart and experienced team, and we all share that desire to shake things up in genomics. All right, so because we're the only company that can make a sequencer for $1,000, and even our largest devices, as Rosemary was showing, are really plug-and-play and require relatively little support, we can use a very different commercial model, you know, to our competition. So we're enabling growth while managing the cost. And we serve these three broad groups of customers, which Gordon introduced. So for S1, the Explorers, we have a really light touch. Mainly use digital to engage, and then use digital and community-based support, which has much lower human overhead than our competitors. And as I mentioned, we also partner in this area with Avantor.
S2, in the middle, is a really fast-growing customer group, where GridION and P2, these are the workhorse devices, and it's a core area for focus for our inside sales, our office-based sales team. S2s also really drive significant medium to long-term growth, particularly in that translational sector, where I mentioned consumable pull-through is in the order of three to four times the equivalent research lab. And S3, or the larger accounts, provide that significant near-term growth, you know, with North America and Europe still expected to continue to be the key drivers of revenue growth. So Rosemary already introduced the benefit of the tech, and I'll try and bring this to life a bit with some examples from our user community. Just to stress, this isn't a long-read technology, so I—we really shouldn't be pigeonholed in that way.
What it is, is a new generation of sequencing tech, and the uppermost benefit here, you know, the richer data is of paramount importance. We're seeing a real understanding of that in the market. A lot of that is due to the National Institutes of Health Telomere-to-Telomere Consortium, who finally finished the human genome, and it's like, "Hang on, what do I hear? Didn't we do that 20 years ago?" And it's, well, no, you know, we didn't finish it then. The tools available at the time just weren't good enough, and a lot of the genome was missed back then. And dialing forward, the current tools from Illumina aren't good enough either. Around a fifth of the genome can't be accurately sequenced with their or any other short-read system, for that matter.
The problem is that short-read sequencing just breaks down in certain areas of the dark genome of the genome, yet the tricky areas include those areas that have got a high proportion of GC bases or highly repetitive regions. These are all no-go zones, really, for the current tech. You sort of look back and say, at a high level, the way in which we understand genomics is a product of the tools we have available at the time to us. And Sanger and Illumina share many of the same limitations, so we've had 20-odd years of looking at the data in the same way. And scientists, you know, the folk consuming that data, are really smart, and they've wrung out every last drop of research value of using these legacy platforms.
Can still go into screening and testing with them based on the research that's been done, but researchers knew if they want to shift the needle and make new discoveries now, they've got to move forward with a different platform, you know, with Nanopore. So we've got a few fun examples here, and the first one is a story of going from a garage to a multi-million dollar business. It's a customer who literally started running a plasmid sequencing service overnight in his garage, and a plasmid is a small circular bit of DNA found in bacteria. We use them in the lab all over the place for lots of different clever things. You could be producing large amounts of a protein, so you want to study it more easily.
Interestingly, they're also used as the delivery system for the enzymes that can edit genomes. So all these new gene therapies that are coming through also rely on them. And historically, folk would use Sanger sequencing, but it's slow and not very accurate, so an entrepreneurial, well-run service took hold of the market, and we've seen this wholesale move to a better, faster, more affordable solution, which, in this case, is now a $multi-million-dollar business. Inside two years, they've become one of our top five customers in the world. So the next example was a recent trip to the West Coast of the U.S. for me, and it's always nice when the day starts with a customer telling you that they're canceling the service contract on their Illumina machine.
The main reason for this one was that it's better and faster, the results that they're getting with Nanopore, at a lower cost and a lower complexity. The story's about helping to treat eye infections, so endophthalmitis or an infection actually inside the eyeball, happens about once every 1,000 or so cataract procedures. But when you're doing as many as they do in the U.S., it's about 4,000 quite serious infections a year to deal with. The current standard to determine the cause of that infection is bacterial culture, so that's the Victorian method of streaking on a plate invented by Louis Pasteur in 1860. It takes 2-5 days for a result, and it costs around $200, and with that, you miss things. Some of the bugs just refuse to grow on the plate that they use.
So sequencing is more comprehensive in determining the bug that's causing the problem, and you might reasonably ask them, "Well, why aren't all these labs using Illumina already?" And it's really down to the cost of the device that gets in the way. They're smaller regional labs. They can't afford hundreds of thousands of dollars in capital cost. And with Illumina, you don't have a choice. You, you have to batch multiple samples to keep the cost down, and you can't really ask a patient to wait a couple of weeks, yeah, with a serious infection. So the alternative is to run the Illumina sequencer half empty, which then makes it also unaffordable. And with Nanopore, as Rosemary showed, none of these problems apply for us. We can go from sample collection to a report in around six hours, all for $150 per sample.
And you'll see from Jonathan later in the day that, you know, we have some very similar stories coming out about respiratory infection. The other interesting thing about these guys is that the practice that the team got led them to look at other conditions, inherited eye conditions, and eye cancers. And again, Rosemary's pointed out the elements of phasing and how that's important, and they're starting to determine genetically inherited conditions. So neither of these applications can be done on the old Illumina box as well as they can on Nanopore. So as well as seeing a significant growth in the account for us, we're also growing into new applications, which is great. Final example is from the NIH, and as we've mentioned, a lot of these no-go areas for Illumina are related to neurological or neuromuscular disease.
So it wasn't that surprising to see that when NIH launched the major project, it's the Center for Alzheimer's and Related Dementias, you know, they're starting to sequence at scale, and they decided to work exclusively with us on that. We could bring some of the experience in large-scale wet lab automation that we kind of learned from the Emirati program and help them to ramp up really quickly. And the project's generating a new genetic resource for Alzheimer's and other related dementias from thousands of human brain samples. Interestingly, again, we're also seeing it already deliver new insights into structural variant-mediated driver mutation for early-onset Parkinson's, which you just can't see with short-read tech.
NIH are also generating some of these proof points, helping us demonstrate the accuracy of the platform, so we can point to NIH publications saying Nanopore are more accurate at base calling clinically relevant variation than Illumina. Just shifting gears slightly, there's been a shift in population scale programs pre- and post-pandemic. There are fewer dollars out there in the national purchases, in purses. So instead of replicating what was done here in the U.K. with Genomics England, they're starting in a more progressive manner, say, 5,000-10,000 samples, rather than going immediately for 100,000. Also, with the impact of the Telomere-to-Telomere work, they're realizing starting with a complete picture is the best way, and we're seeing, you know, groups like Singapore publishing on exclusively Nanopore-generated T2T genomes and using those to augment their national program.
With Nanopore, you got the opportunity to start small in scale, do a few thousand Nanopore genomes, really get to look at the, the data and then decide what to do next. You know, probably more Nanopore genomes. We don't have to bang on the door of these programs like we used to. I think they, they really know and respect the progress that we've made and are tending to invite us into conversations. And obviously, these programs have been a key driver of S3 growth, and although we think they'll continue, they're likely to play out as a larger number of smaller opportunities from here on in. In the U.K., we're seeing an enormous amount of progress, and we just wanted to flesh out how the adoption in the U.K. is going.
And it sort of illustrates the way for other countries and how projects start to connect and grow momentum. We're moving forward with Genomics England on a couple of fronts. Yeah, I was back in the day with Illumina as we... I was actually wearing this suit in Downing Street when the deal got signed. You know, and it was a sort of qualified success. Of the main project, families who had kids with rare genetic conditions, only about a quarter of that main program got a diagnosis of the rare disease that was affecting their child. We're seeing way better results than that in places like Stanford. So we're going back with Genomics England to sequence 7,500 of those as-yet undiagnosed samples.
In addition to this, Cancer 1.0 on Illumina technology didn't really deliver turnaround time, richness of data that was needed were just not there, and I'm sure Prof. Andy, you know, can talk and provide a bit more color on this. So we're partnering to provide the technology platform for Cancer 2.0, which is now rolling out across multiple centers. On top of Genomics England, in Q1, we announced a 22,000 sample cohort led by NIHR BioResource. That's for precision psychiatry, so that's gonna be done exclusively or is being done exclusively with Nanopore. That takes us back to those neurological areas where Illumina can't sequence properly.
So, I think we then, again, see more excitement at Exeter, turnaround time and improved diagnostic yield, driving things as far as the, the adoption down there at the National Rapid Rare Disease Program. And then finally, the rollout of, of pathogen sequencing to multiple NHS sites, which Jonathan and Emma will be chatting through soon. And it's so exciting to see this and, and defines the pathway for, for other countries. All the efforts that I've outlined are supported by a world-class global marketing team, and they ensure we have events like London Calling and Nanopore Days, which are viewed as the best in the, the industry. Digital marketing teams are best in class, and you can see our share of voice on social, we're the blue line at the top there.
All the efforts are then championed by a sizable community of key opinion leaders who are making discoveries with Nanopore. They help us spread the word, you know, of how our technology isn't the future so much, but it should be the new normal... for, for genomics. We're, we're really improving in getting that technical messaging out in a crisp way to potential customers, and it's important to translate the geeky science into what it delivers for them. And the team's wrapping this into a new campaign to illustrate what's been missing from traditional sequencing, and that the richer data from long reads, from methylation, from isoforms, shouldn't be viewed as an add-on anymore, but it's really key to be viewed as doing up-to-date research. So here's the video. You have to have some applause for our marketing team. I love it.
So we're doing the hard launch of this at ASHG, and I just can't wait to see the customer reactions. Anyway, just bringing this to a close. Delivering top-class customer service is also really important to reorder rates and our market reputation. Yeah, we can't deliver on the growth expectations without the capability to back it up, and there are two sides to delivering best-in-class customer experience, really. First, digital, making sure that the systems for ordering, logistics, training, yeah, to help users get started are world-class. We're fortunate, as Rosemary kind of touched on, we got heaps of metadata that can help support users proactively. Before they take a misstep, we're helping them correct things and get the best out of the sequencing run.
The other thing is, in the event that someone does have a mishap, then yeah, the sequencing run isn't lost. You just stop, wash the flow cell, reload, rather than wait several days before knowing that your run's screwed up, in yeah, in the case of the competition. The other side then is investment in local teams and partners to provide application and technical support so that reorder rates and opportunities for cross-selling and upselling are taken. So in summary, the commercial model enables us to go after the whole of that breadth of the opportunity in the life science research market. We're introducing new capabilities for customers that drive higher expectations of richness of data really, yeah, in the whole market. Add to that improved turnaround time and improved accessibility, you know, so that technology can be available in every lab.
So just finishing off, you know, so we've seen examples of S 1 accounts transforming into multimillion-dollar businesses. We've seen this breadth of reach that we have from the partnering model, and then focused development of key opinion leaders in S2 and S 3 accounts who are changing the market expectations as we watch. And you can see how easy it is to be totally excited. I am, and, yeah, the whole commercial team are. It's really a privilege to be out with these mind-blowing products and working hard, and what we're doing right now is kind of locking in future growth. We're just the tip of the spear, though, and you have to acknowledge the massive support we get from the rest of the company and what they're doing. So a big thank you to all of them.
Right, so we're now moving to Q&A, and we'll take just a minute to rearrange the seating, but it's a pleasure for me to invite Rosemary, Gordon, and Zoe back onto the stage. So thanks, guys.
Thanks, everyone. So we've just got a few minutes for Q&A. We're running a little bit over, but we don't want to deprive you of questions. If you would like to ask a question, if you could just wait for the microphone to arrive, and perhaps we could ask you to ask one question at a time, that would be fantastic. Actually, do you know what? We actually got one online that we wanted to quickly start with, which was, a question came in around the most exciting development in the last year and what you'd like to see in the next year. So just to quickly start off with that, and then we'll take some questions from the floor.
Rosemary, would you like to answer that one?
Oh, just one? Yeah, I really think we've loved the launch of the P2 platform. That's really so captured a lot of imagination with our customers. We've got over 500 out there, and the types of applications and the type of feedback that we're getting is fantastic.
Do you mind if I share mine? It's really the Stanford world record, which you'll all have seen, that they're doing very rapid turnaround, whole genomes, and having worked with families who've got kids with rare genetic conditions for many years, seeing the... not just the speed with which we can be doing that, but it's more about the improvement in diagnostic yield. John Gorzynski, who's the PI, who's running that program, was at a recent Nanopore day up in the Bay Area and was talking about, yeah, significant improvements to diagnostic yield and just helping resolve these problems for families is wonderful to be involved with.
We're playing that game, intraoperative brain surgery, real-time sequencing with a MinION.
Excellent. We've got a question from Charles.
Thanks. Thanks for taking the question. Charles Weston from RBC. I'm gonna wrap two into one. In terms of the price, you talked about $690 and $345 per genome. What's the, what's the price that's achievable by people actually in the field, and is that an all-in sequencing price? And then part B relates to the whole Light S hield, Twitter storm, and the productivity improvements appear potentially quite substantial. So does that decrease those prices further? Thanks.
Sure. It's Twitter storm, I would say Twitter debate, and I think it's really good to see our customers get creative. Yeah, so, we've introduced Light S hield so that customers cover up their flow cells when sequencing. Basically, it massively improves our output when you're sequencing really short strands. Most of the customers doing whole genome sequencing were doing quite long. It does help them. It reduces variability in their hands, so it does help. In terms of what customers can get in field today, so one of the charts that we show where customers are marching towards that 150 gigabases, that is a live action customer sequencing hundreds of genomes a month.
In that case, you know, that customer is quite comfortably getting $690 a genome, because they want a high depth, a high-depth coverage. We do have a lot of customers, the deCODE paper being a fantastic example, where they were getting structural variation and methylation. They were topping up their short-read sequencing with that information. They only need 15X depth, and so in that case, they were generating, they could be generating two genomes per flow cell, so three-four-five genomes per flow cell . So yeah, they are real-world prices, and it is a library preparation kit and a flow cell, which are the two components that you'd need to buy from Oxford Nanopore.
Yeah, I think our experience at fine-grained control of the metadata of wet lab, from extraction to prep to sequencing, is now pretty well under control. So providing people with tech transfer around how to scale up operations is straightforward. Then we've done an awful lot of work on the human variation workflow and plugging into tertiary analytics. So for that human sequencing market, which offers us the biggest opportunity for growth, that I'm really comfortable with.
We've got, Odysseas question.
So I have asked you this before, but I can understand things can change with time and, and partnerships. So you have quite a wide addressable market reflecting the wide applications of your platform across a variety of research and clinical areas. If you had to pick three clinical areas, so sort of as specific as possible, as in what setting within cancer, what setting within infectious disease, that your conviction would be the highest in terms of commercial success, what would those be, and how is your platform differentiated in this application store for better commercial prospects than your peers?
So, yeah, I'm still not going to answer your question. I think the thing that Clive always says is, "We sell fishing nets. We don't go fishing." And that's really important strategically. The customers will innovate, and it won't necessarily be the largest commercial opportunity. It'll be the one that really showcases and opens the door, that the future of genomics is native modifications on DNA or RNA. RNA, in particular, for industrial biopharma applications. In terms of trying to pick one, two, or three, I don't think we need to, because the inbounds we get... And Emma will touch on Asuragen. We already have partnerships where people have come with a unique value proposition that only Nanopore can solve.
That then allows us to have this closed loop, open developer license, like Apple, and therefore, as they innovate, both parties are going to profit from that innovation, and that's kind of how we look at those. Picking three is not allowed in the company. Everybody can have their top three, but they're not allowed to push them. That's just the way we think about how we want to commercialize. I don't know, Rich, if you wanted to add anything.
That's fine.
Rich is the one who rocks up with lots of ideas all the time and we just say, "No.
Again, I think we see, yeah, particularly in cancer, yeah, we already have quite a lot of customers using us for fusion detection, particularly for things like hematological malignancy, you know, kids who need to get on drugs way quicker than they currently are. So we're seeing those applications sort of start to bubble up already.
Got a question from Paul.
Thank you, Zoe. Paul Cuddon from Numis. Just playing devil's advocate here, you've got 100 S3 customers, Illumina's got 8,000, so kind of a similar size. So what's the pushback still from that customer group? And secondly, have you got to kind of wait for these new mega projects to kind of crack into those type of customers, or can you get into their more recurring budgets?
I think the 100 S3 customers is growing very rapidly. PromethION's only been around post-pandemic. We launched it about a year before the pandemic, so it didn't really get a chance to stick, compared to Illumina, who have been around for 20 years. And that marketplace, that centralized, has been around for a further 20 years prior to that, for Sanger sequencing. We are interested in penetrating those markets, but below the waterline, we think there's 10x that customer base, who would sequence complex genomes in their own laboratories, and the, that sort of S1 group drive that adoption.
And that's why P2 looks like a really interesting platform for us, 'cause now they can do at low cost, at low entry point, quite complex genomes and biology, and that we think will continue to, as we saw with compute, move from centralized to distributed, decentralized sequencing. And what that means is customers then go out, generate data, get grants-
... and you get that increasing customer base transitioning from service provision, sending their samples to a large central facility, to doing sequencing in real time in their labs. And that's what catalyzes that change.
Yeah, I think we're also as a team, being really disciplined and focused. An example of that might be in the single-cell market, where our marketing teams and product managers done a fabulous job, fully integrated end-to-end workflow based on 10x. And even I can sell this, right? You just go out and say: "Well, you're spending $1,200 on your prep with 10x. You then get your cDNA, put it on a NovaSeq, and degrade that data to about 20% of the value.
All of that isoform landscape is restricted, and if you're doing cancer, which probably 70% of that market are, or immuno work, you've got to see the whole picture. So it's pretty simple for us to go in and say, "You've got a bunch of these cDNAs in the freezer, you know, that you've not smashed to bits to put on the Illumina machine. Let's have a look at them with you," as Gordon says, with the P2, and then quite rapidly, these people have got hundreds of samples, which means that the model then for the, you know, the P24, you know, some of the larger packs that we have around that, are coming through and being really focused around campaigns.
We know where those top 200 10x users are, and the teams are all on the hook for going out and communicating with those people.
That's got time for one more. Can we get a microphone? Sorry. We've another Q&A session later, so everyone gets to-
Thank you. James Gordon from JP Morgan. It was just one question, actually, on further innovation in the actual sequencing technology. So is it fair that you're largely now sort of done on detail, accuracy, speed, and maybe even getting there on price, and so lots of it now is just about, I say just, but it, it's about getting people to use it in commercial applications or making it easier for people to use it. Or is there actually more to do on the innovation? Is there further things you're gonna be able to do with the technology that are gonna be important?
Perfection is the enemy of progress, no doubt, but we are not done. We will deliver the most comprehensive, the most accurate, accurate genomes, Telomere-to-Telomere, ultimately on one flow cell at $100. Then we think we might be done, but then we're gonna introduce a voltage chip and do that in an hour for $10. So we won't be done until we have highly polished, complete genomes. In Singapore, I said to somebody, "What happened 20 years ago?" And somebody put their hand up and said, "Oh, that was the first genome was mapped." A customer stood up and said, "That's a draft genome." We've had a draft genome for 20 years, so we're nowhere near finished. We're just starting on this.
Fantastic. Well, we've got one time for one micro question. One minute left on the clock. Yeah.
Thank you for taking my questions. Blanka Porkolab from Barclays. Kind of going back to a previous one around Illumina, and obviously, they've been facing some challenges lately. I guess, you know, it'd be great to know, have you benefited this in any way in terms of hiring or winning contracts or customer acquisitions, particularly on the S3 side? Thank you.
Rich, do you want to take that one?
Yeah, I can do. Yeah, obviously, I... Again, you, it's unfortunate to think that, that things are so unsettled over there, but it has meant that we've, you know, we've got many people in the room here who, who've joined us over the last six to 12 months from Illumina. We're bringing in the best and the brightest people who, unfortunately for them, have got a bit frustrated over there. And I, I'd probably refer back to the slides, things like the NIHR BioResource. A lot of the PIs involved in that were actually in the forerunner of Genomics England, and they can see now that for neurological conditions, you just don't get a full enough picture and, you know, came to engage with our local U.K. team and, and pushed that through.
So, there's a combination of market awareness and understanding of the capabilities that we're bringing, and, you know, yeah, we're also bringing in top talent at the moment.
Fantastic. Well, I think that's all we've got time for for now for Q&A, and we've got a customer panel coming up right next. But thank you very much indeed.
Thank you.
Thank you.
Thanks. So you've heard about the life science research tools market, that foundational phase of discovery, things that are happening even over the road at the Natural History Museum, where they're using Nanopore for biodiversity and conservation research. So across the road, the other side at Imperial, where they're looking at biomedical research and discovery. And you've also heard about our intents to drive uses in clinical settings that drives both growth and, of course, the impact that everyone in this world, I think, wants to see. So from discovery to impact, from bench to bedside, is driven many times by pioneering scientists and clinicians and the people in business. And we're really lucky today to be joined by four people leading in the areas that we've highlighted as focus areas for us, so cancer, human disease, and infectious disease.
So firstly, we're gonna start off with an infectious disease session, and I'm really happy to welcome to the stage Mark Miller, who's EVP and Chief Medical Officer of bioMérieux, and also Jonathan Edgeworth, who's Consultant Microbiologist at Guy's and St Thomas' Hospital.
Thank you.
Thank you. Great. So I don't know how many of you are very familiar with bioMérieux, but just a few quick stats about bioMérieux. So it's a world leader in the field of in vitro diagnostics since 1963, with products being sold in more than 160 countries and about EUR 3.6 billion in revenue in 2022. And a lot of the work is around infectious disease, determining the source of disease and consumer safety.
You may have also seen this morning that we announced a strategic investment from bioMérieux, which is really strengthening the collaboration between our two countries. Now, Mark's not here to talk about the transaction, but he is here to talk about the relationship that our two companies have. So really, we start off thinking about the complementary elements of our, of our two companies, how we work together. So why is this partnership exciting, and how are the two companies complementary in that market?
Thanks. It's a great pleasure to be here. We're very excited as a company to be here. I'm very excited personally to be here, so thank you for the invitation from everybody. So yes, for those of you who don't know bioMérieux, you heard the statistics, but we make IVDs. We make in vitro diagnostics that have gone through regulatory pathways, and every test is associated with a patient. Every test result affects a patient, patient management, patient diagnosis. So why are we interested in Oxford Nanopore? It seems obvious to us anyways. We have all of our success really based on innovation. Innovation that brings kind of revolutionary technology to patients. We always look for things that are faster, give more actionable information, and are easier to use. And all three of those, we look for impact.
You saw on the video, impact, we always look for patient impact. It's my job in medical affairs is to look for that patient impact or healthcare system impact. And so it was natural that as we look in the revolutions and the technologies that have brought success to bioMérieux, so automating blood culture systems, automating susceptibility testing, MALDI-TOF mass spectrometry, we're the pioneers of syndromic, highly multiplex PCR, that the next evolution or revolution in clinical microbiology we see as Oxford sequencing, Oxford Nanopore sequencing. And so it's natural for us to be then take the next step and to want to collaborate and to develop products that really start impacting patients in infectious diseases. And so that it's very natural to us, it's natural, it's very complementary.
You have the technology, which is really astounding and, and very, very much correlated with impacting patient care. We have the knowledge of how to bring IVD products to market, regulatory pathways, medical affairs, KOL interactions, evidence generation, and all that's required for maximum market access, and so the two are very complementary and very exciting.
So you've talked about some of the elements that are involved in bringing products to market. It's obviously a very complex and a very nuanced process that takes time and skills. So where are the sort of the headwinds and the tailwinds in terms of bringing infectious disease tests to market that changed market dynamics?
Yeah. I mean, there's always challenges, and especially in IVDs. There's an ever-increasing complexity of regulatory pathways, which also now have become geographic. There's also geographic specialization in regulatory pathways. We also have to do a lot of evidence generation to show medical and economic benefits. So just being the latest, greatest technology is not good enough, whether it's a diagnostic, a vaccine, or a therapeutic, you have to show that there's a real impact, medically or economically on the patient or on the healthcare systems. So we have to do a lot of that evidence generation, a lot of interaction with stakeholders, patients, and caregivers. Then there's also this competing centralization and decentralization of labs that's going on, which we have to deal with.
Some tests are better suited for point of care, other tests are suited for reference labs, and there's in between as well. We have to deal with all of this, and all this leads to a complexity that means that we have to, you know, have experience in bringing these products to market.
So we were talking earlier about TB, and I know this is something you feel very passionate about. And we are all very aware of the specter of antibiotic resistance that's looming. I think it's been 10 years since the AMR report, the O'Neill report came out, and one of the things that we know about is obviously understanding drug resistance is key to being able to manage it. So we've spoken about TB being one of the projects that we're working on together. What is it around the challenge there and potentially the solution that's exciting you?
So that's probably one of the most exciting projects, certainly personally, but also, business to business. If you look at the statistics today, so just in general, antibiotic resistance, which we're very graciously less affected in Western Europe and North America, but in Asia and Africa and Latin America, are absolutely horrific. And so when you look at the statistics, there's about 5 million people every year that die related to antibiotic-resistant infections, and about 1.3 million that die directly from it. Now, I'm not minimizing COVID. COVID killed about 20 million people, but it killed 20 million people over about 2-3 years. This antibiotic resistance kills 1.3 million people directly each and every year, and it's growing. So antibiotic resistance is huge. 80%-85% of what we do at bioMérieux is related to, directly or indirectly, to antibiotic resistance.
If you look at tuberculosis as a particular case, it's very frightening. So every year, I know, again, we're less touched by tuberculosis in the West, but, in the world in general, mostly in developing countries, there's 10 million new cases of TB every year. 1.6 million of those die. Of the ones with cases and the ones who die, 10% of those are children, and when you look at the, even the treatment, 20% of drug-resistant tuberculosis, which is a huge problem requiring one, two, three years of treatment and three, four, five different drugs, okay? That occurs in 20% of people who fail treatment. So these are, these are numbers that are absolutely staggering in terms of the number of people and the, the number of tests, and the amount of drug resistance.
Today, it is so difficult to diagnose drug-resistant tuberculosis. It takes four, five, six weeks to determine the entire susceptibility profile, to find out who needs additional drugs. There's a lot of treatment failures related to that, and we can do that, we can do that together between bioMérieux and Oxford Nanopore, we can determine, we can produce results in about two days instead of, you know, almost two months sometimes. So, this is very dramatic, and again, if I go back to my first statement, impact on patients, you can imagine what the impact on patients is, young or old, with tuberculosis, if we can tell that they have drug-resistant or drug-susceptible tuberculosis in one or two days instead of six to eight weeks.
That's really amazing, and it talks back to the impact point that we were talking about before. I'm sure you'll get some questions on that, but I just want to quickly ask Jonathan. So Jonathan Edgeworth is not only a consultant at Guy's and St Thomas', but also works with us at Oxford Nanopore to make sure that we can deliver this impact and this commercial opportunity, not only in the U.K., but globally, and in helping us to understand exactly what you've spoken about, about how healthcare providers need to think about these problems. So I know you're doing really exciting work in respiratory metagenomics, particularly within the intensive care setting, and I wonder if you could quickly tell us a little bit about that.
Yeah. Thanks, Zoe. So I've been working on Nanopore sequencing and metagenomics for about five years now. Metagenomics is when you take clinical samples, and you essentially sequence all the organisms in those samples. What's unique about Oxford Nanopore technology is that's within six hours, so you can provide those results back to patients to clinicians on the ICU on that same day. So we took that research, and for the last three years, over the winter seasons, we've been providing metagenomic pilot services for patients coming in who are ventilated with severe community and hospital-acquired pneumonia. The clinicians send us the samples on the patients they're most concerned about in the morning, and then in the afternoon, on a ward round or whenever results arrive, we'll go down at the bedside and provide those results to clinicians.
So, we've frankly been quite astounded at the impacts we've seen. So, it's not just the results from culture that we rely on for our day-to-day practice, but we find additional, and previously undetected hidden organisms, perhaps things that are obscured by antibiotics, things that we weren't looking for, and that has a significant impact for patients. So actually, on the day we came back with those results, we can change the antibiotics in almost half the patients. You either put them on the right antibiotics 'cause they're not, or you can stop the antibiotics that they don't need, as Mark said, and that limits the pressure on antimicrobial resistance. But the thing is, because it's a sequence-based test, you also identify the antimicrobial resistance determinants and the virulence factors and the typing.
So you have information not only for patient care, but you sort of get free as a secondary use case, genetic information that helps with AMR surveillance and pandemic preparedness. So this is all coming out in publications at the moment, and we've shown that data to NHS England and UKHSA, and they too can see quite what a revolutionary impact that could have for patient care. But also, I think they're interested in the AMR surveillance and pandemic preparedness. So you see, 'cause this sequence data can be immediately transferred, not only for a clinical report, but it could be collated nationally and even internationally. So you have a real-time identification of the genetic AMR determinants. So even from a biosecurity or from a natural pandemic preparedness perspective, you can be sequencing novel things and get a really rapid view of what's happening.
But of course, pneumonia, sepsis, antimicrobial resistance and surveillance, pandemic preparedness, these aren't just in the U.K., these are global issues. So we are also sharing results and sharing our protocols with labs in Southeast Asia, in U.S., Europe, and elsewhere, and they are working with us to do similar things. And I think what's gonna be exciting now is to see how we can bring all that data together and see how at a sort of national perspective, we can—an international perspective, we can link all that data together to achieve those goals.
Before we take a couple of questions, I think it's really interesting, we were talking earlier about, both Mark and Jonathan hold posts in industry and in academia, and it'd be interesting to hear, why did you, pursue an industrial, career now after a long clinical career? What's the, what's the difference that that makes?
Yeah. So genomic healthcare is the future, and there is a limit, actually, frankly, to what you can do as a full-time clinician in a hospital network, even albeit one as proactive and innovative as Guy's and St Thomas' Hospital. If you really want to see that global impact and to spend time bringing people together, for example, this metagenomic service, we're looking in advanced stages of discussion with UKHSA, NHS England, about rolling this out around the U.K. If you want to be able to do that and go globally and really see that industry multiplier effect, you have to bring industry and academia together, and that's why I've done that.
Fantastic. We've got time for two quick questions before we welcome the next stage.
...Thank you for this. So in talking about the infectious disease market and the benefits of sequence, fast, really, really high multiplex, this actually seems a lot like the your BioFire platform. So how do you see that complement versus maybe cannibalize? I mean, like, why did you go forward with that, with this considering, like, it does seem to be a lot of the same exact kind of advantages?
Yeah, it's actually not cannibalistic at all. We see it as very complementary and additive. So there are applications, and again, I think Gordon said it very well, I mean, people find the value in the products when they come, and you'll see that sequencing has very specific applications, which are very high value. So epidemiologic typing of organisms for outbreak investigation and for tracking, like with SARS-CoV-2. But also, there's, you know, you can see there's going to be a lot of sequencing involved in tracking other pathogens and global biopreparedness like dengue, and influenza, et cetera, et cetera. But for routine testing or routine multiplexing PCR, which is extremely fast, you know, we just launched the platform with 12-minute results, you know, multiplex. It's good enough for that application, and you don't need to go to sequencing for that particular application.
Sequencing is great for unknown infections by rare organisms. It's great for tuberculosis, where it just takes too long with standard of care. So there are applications which become very apparent that sequencing is best, highly multiplex PCR is best, culture is best, and we see this as very complementary and additive.
Great. One from Odysseas.
Hi, and another one for Mark from me, as a follow-up to the previous one. So, looking at the multidrug-resistant TB assay that you're working on together, is there a number of targets, let's say above 70, that make NGS cheaper than BioFire Multiplex? And, on the previous point made, could we see a panel similar to yours, let's say on the respiratory side, using Nanopore technology, that could eventually come at a lower cost, even if it's at the expense of time?
Yeah, I mean, that's a good question, and you have to ask, for the particular application, which technology is best? And I was talking about that during the break, is what is good enough, good enough to help patients, without doing too little and too much. I don't think that with multiplex PCR, you are going to achieve the degree of confidence in tuberculosis and tuberculosis resistance that you will with Nanopore sequencing. Nanopore sequencing gives you a vast number of, genes and mutations that are relevant for antibiotic resistance on the most commonly used drugs, both first, second, and third-line drugs, which we cannot obtain right now with multiplex PCR, and we are not going for. So again, it's very complementary, but no, I don't see them as competing, a BioFire panel for TB resistance and, Oxford Nanopore sequencing.
You know, we've decided that this is the solution that labs need and the one that's going to benefit patients the most with that impact we're looking for.
Thank you. Well, thank you very much. Now, for the second half of our panel, I'd love to welcome Danny Miller and Andrew Beggs to the stage. So Danny Miller, as he appears now, is pioneering human genetics at the University of Washington and Seattle Children's Hospital. And Andrew Beggs has joined us from Birmingham, from one of the U.K.'s biggest cancer hubs, where he is professor of cancer genetics and, of course, surgery as well, and doing some really, really exciting projects. So welcome, thank you very much for traveling from Birmingham and indeed from Seattle to be with us here today. So, Danny, we'll start with your work as a clinician and a researcher in the human genetics space.
So you see a lot of children with really hard-to-diagnose disease, hard-to-diagnose disease, and obviously, those families are going on a very difficult journey. Could you share with the audience perhaps what that journey looks like and how Nanopore's solutions can start answering some of those really difficult questions?
Yeah, of course. So as a clinician, you know, I see the world of clinical testing from the clinic room, right? And that... It's really a broken system, where we do a test, we get a result back, we do another test, we get a result back, and that can take years to do. The basic idea is to use a new technology, long-read sequencing, Nanopore sequencing, to replicate everything that we do over that 2- or 3-year period in a single test. It increases access for patients, it reduces barriers to accessing comprehensive testing, and it gets kind of those treatments to those families, to those individuals, much quicker. So everything that we do now in clinical genetic testing can be replicated with a single test with Nanopore sequencing. That's really the vision.
And how does that make a difference to the whole patient journey and perhaps the sort of some of the economics of the system as well?
Yeah, I like to... I often like to say that, you know, in the future, what I see is that you could actually offer all other types of clinical testing for free. You could do short-read sequencing for free, you could do an array for free. You would still choose to do long-read sequencing because it's so much more information rich. You save money in the lab, you save money in as far as clinical visits go, that make up for that difference in cost, right? Because the complexity of analyzing short-read data, of analyzing methylation data, things like that, is it's complex, right? So when you simplify it with long reads, it saves costs to the system.
Can you see the diagnostic odyssey, that long pathway shortening in the future with that then?
Yeah, I can see it shortening to the couple hours after the kiddo is born, and they may have symptoms of some disorder. You sequence them basically in real time. You get an idea of what's going on very quickly. You know, that 6-9-hour window in the NICU becomes accessible.
In fact, your paper showing a 3-hour diagnosis recently was really quite well received within the scientific community, wasn't it?
Yeah, we sequenced a kiddo three hours from birth. We knew what he was at risk of having, so we did whole genome sequencing and targeted analysis to show that he didn't actually inherit the variants he was at risk of having.
... three hours, quite something. So a lot of your work that you're really famous for, especially within the people who work for Oxford Nanopore, who think it's just fantastic, is around adaptive sequencing, adaptive sampling, when we're able to—because we've uniquely got this real-time data streaming, we're effectively able to zoom into either a molecule of interest or a region, genomic region of interest, through electronics rather than through sort of pre-kits that pull down those regions. So how has that impacted your research in human genetics?
A couple of ways. I'll say, first off, you know, I always think about long-term, just whole genome sequencing as probably the easiest, simplest way to go. But in the short term, you know, how can we get Nanopore into the clinical testing environment? I think adaptive sampling is a way to do that 'cause we can replicate some of these panels, cancer panels, immunology panels, things like that, and we can see the entire gene, and we can get idea of what structural variants look like. So these complex rearrangements that were talked about that make up a large fraction of disease-causing variants that we really can't see using short-read-based approaches. I think that gets the technology into the clinical lab, and then once it's there, we can build on that and expand into, things like whole genome sequencing and analysis.
And then, you know, I could see, you know, ideas like methylation profiling, identifying diseases, viral diseases, things like that, just kind of as an aside when you have this technology. You know, I don't think you need adaptive sampling for that, but I think it would be helpful in that regard, too.
So you've mentioned methylation. Obviously, Rosemary and Gordon has, and Rich have all spoken about methylation being a key differentiator for Nanopore because you get the methylation data in real time for free, and whereas with other technologies, there are other sort of complex procedures that you have to go through. And I think, Andrew, you've been doing a lot of work in pediatric cancers with methylation, haven't you? It'd be really interesting to hear about that.
Yeah, that's correct. So we serendipitously discovered that Nanopore is not only good at long reads, it's also good at short reads, and it's also very good at methylation on short reads. So we have developed an assay system where you can profile circulating tumor DNA from patients, in this case, children. And this is part of a larger collaboration. Cancer Research U.K. have funded what's called the Stratified Medicine Paediatrics 1 and 2, and the latest version of the project will mean that every child eligible with cancer in the U.K. will undergo whole genome sequencing of their tumor, but also my lab sequencing of their circulating tumor DNA.
Now, the reason methylation is important is because it allows us to distinguish between tumor types, it allows us to do disease monitoring, it allows us to look at drug resistance as well, interestingly, and we can do that by looking at the pattern of methylation. So in the past, we would have to biopsy children, very invasive, especially brain tumors, in order to get a diagnosis of what the brain tumor actually is to treat it. But now we can do a liquid biopsy and get a brain tumor type. We can do CSF as well, cerebrospinal fluid, which, although other technologies can do, it's just not as fast. You know, we can go from getting the sample from a patient, and we can generate a library within, I mean, Rosemary said an hour and a half.
Actually, we think it's a bit quicker than that, probably like 30 or 40 minutes in our lab. We can get it onto the sequencer, we can have our answers usually by the end of the day. The other key thing about it is the volumes of plasma. Commercial methylation assays, I'm going to mention it, GRAIL, you know, says it, you know, they need 30, 40, 50 mL of plasma. Our assay can use two or one, and we can put two or three nanograms of input into the assay and generate just as good data. And unlike assays like the one I just mentioned, it's not as broad. Those assays aren't as broad. They, they've got a limited panel. The Nanopore assay is a shotgun assay.
It covers everything that's in the DNA sample, and so the amount of information we get from it, we don't just get methylation, we get structural variants, we get, motif analysis, we get fragmentomics, we get copy number variants, and it mirrors what we see in the tumor. So it's really exciting. And actually, a final thing that I presented at Children with Cancer last week, their national conference, is we can detect mutations and structural variants, so we can detect neoantigens in plasma to design tumor vaccines for children with cancer, mRNA vaccines like Pfizer, and that's all come from this Nanopore assay. It-- for us, it's been an enormously transformative technology, and it's really got unlimited potential.
Well, methylation, Danny, I think it's not just... Obviously, methylation is very associated with cancer, and you get a lot of information, but it's also important in human disease, isn't it? So how is that influencing your work?
Yeah, many, many human diseases have methylation signatures. So you can look genome-wide, and you can say: Is this pattern consistent with other cases that I've seen before? There was a slide about, you know, the EPIC array, which has about 800,000 CpG sites. You know, there's 44 million in the human genome. Why aren't we using all those? So using Nanopore, we can actually see all those, and we can build better classifiers for methylation.
Fantastic. And how will that play out into, potentially into future practice, as we move from that sort of that bench to the bedside, process?
I think I see it in a couple of ways. The first is it increases confidence in a call, so you see a variant in a gene that may not, you know, you may not have enough evidence to call it pathogenic or likely pathogenic, but then you have the methylation model that supports that diagnosis, so it can help elevate that variant to the category that you want. I could see it as, you know, lower coverage genomes get you to an answer quicker. So you can imagine a situation in which a newborn is having symptoms of a disorder. Within an hour or so, you have enough data at the methylation level to actually get an idea of what the diagnosis is or could be.
It kind of supports this earlier return of results for families and for clinicians.
So thinking about turnaround time, and, Andrew, you've spoken about this in your research, about how important having those answers quicker is. What does that-- how are you thinking about turnaround time as part of that whole clinical pathway? It's obviously not just about the sequencing, but it's about where the device is and how the workflows are and what the skills are to use the technology. So the work that you're doing, how does that build foundation for sort of easier access to cancer diagnostics?
So we do tumors as well as plasma, and one of the advantages we found of Nanopore is a conventional Illumina-based prep, and one where you need to do methylation with bisulfite conversion. It could take you all day. The Nanopore is the same assay. We don't really need to do anything. We just use the ligation kit. We put it in. I mean, we do have a few tweaks, and you add it to the flow cell, and it just works. The other advantage is, yes, you can get a massive P24, which is not that massive. I mean, we just had a NovaSeq installed in our lab, and we had to have the floor reinforced, whereas the P24 sits on the bench, and it's very easy. But we've just bought a P2 Solo, and it's extremely useful.
We can put it on our arm, we can take it to places, we can bring it to the patient. Others have used it in the operating theater, but, you know, we're I mean, one of the other things we can use it for is we could take it to pediatric clinics with cancer diagnosis. There's really no limit to it, and it's the portability, but it's also the speed of reagent preparation analysis that's advantageous for us.
So Rosemary said that the P2 launch was the most exciting thing that happened in the past year. So obviously, you're using it, Andrew. Danny, you've talked about potentially using it soon. What does that play forward into these clinical systems? P2, if we're bringing high output genomics to essentially the palm of your hand for the first time, how does that translate into potential future clinical practice?
I think of it as... I see a lot of kids from Alaska, that come down to Seattle, and that's a hard trip. They live in villages, maybe. Could we get sequencers in those villages, in those kind of secondary care sites, where we could get the data generated, be able to analyze it, think about it before the family gets there, and then we can have a discussion with them about the diagnosis? Or even, do they even need to come, right? Can you just transfer the data, and we can look at it? Other places, think about them in newborn nurseries, you know, right next to your devices that measure glucose and bilirubin, things like that. You know, that's, that's possible with these smaller devices like this.
Fantastic.
And for me, it's pretty similar. I mean, back in the day, when I first started as a doctor, I'm still a surgeon, but which sounds bizarre with genetics, but I do both. We, you know, blood analyzers are big machines, but now every hospital in the world has a blood analyzer just about for full blood count. It's gonna be the same with genetics, you know? We're not gonna have these big machines sitting in central labs. It's gonna be devolved because the market can't go any other way. It has to, it has to go democratized, it has to be spread out, and more and more people will use it. The only technology at the moment to do that is nanopore technology.
Fantastic. Well, thank you so much. We've got time for a few questions. Charles has got one. I think he's got the mic. There we go.
Thanks very much. You're obviously both, you know, cutting-edge clinicians and researchers. How does what you've developed translate into everybody else through that curve of, you know, early adopters and late adopters, et cetera? How long does it take? Who needs to champion it?
Yeah. You know, my lab, we run hundreds of flow cells a year. I don't think we're the lab Rosemary was talking about, but we've got-
Mm-hmm.
Pretty good experience. You know, there is a learning curve, but that curve, that knowledge can be transferred into the clinical lab. As we think about clinical applications, we think about how do we automate it so that we can kind of remove that human element that could introduce variability into each experiment. But I think, you know, thinking... I've been using Nanopore for, I don't know, seven or eight years now. It was highly variable initially, and now it's becoming more stable and more reliable to where we, when we bring a new person into the lab, we have them onboarded and being productive at kind of the level we expect within a week or so. So we're, we're seeing really good ramp-up times and really good stability.
Andrew?
I can say this 'cause I'm a surgeon, but surgeons have a reputation for being a bit thick, and, I'm allowed to say that. And we have a program for surgical research fellows, and none of them come in with basically no bench experience, not even how we are able to hold a pipette. And like Danny, we can get them to Nanopore sequence, usually with a day or two. And I don't-- I wouldn't be comfortable saying to them, "Can you do an Illumina library prep and put it on the NovaSeq?" Not after two days. I would be hiding in a cupboard. So the fact that we can get them to do the Nanopore, I would argue, the technology, it lends itself to easy adoption. And the assays that we're doing, they're not complicated, not compared to the other ones.
I guess, what about the other... What about the, all the other labs that are not doing it now? You know, you're cutting edge. How do other labs start to adopt that? Are they? How long does it take? What does that curve look like?
For us, I, I guess people bring us libraries now for sequencing because we have a P24. They're... I'm seeing less and less variability in those preps. So I think people are, and there are labs that aren't doing this all the time, right? They might buy a kit, do the prep, and send it to us. It seems more stable, and the ability to reproduce those results seems high. So, I think a couple of years ago, I would have a different answer for you, but it's... Everyone's getting more comfortable with it.
I think we're excited by introducing P2, which is still really fresh out the gate, but we're excited by giving the facilities for people to do that. So the ability to do high output sequencing in a distributed fashion probably haven't really been available till since the beginning of this year, so. And obviously, Rosemary talked about Q -Lines and all of the, the work that we're doing to bring these more sort of locked down workflows into slightly more regulated environments. So we're excited about it. And one more question? But this is... He's already had two. Should we give him another one? Go on. One though.
One for Andrew, please. So given that we've seen a few insurance coverage pilots for GRAIL so far, I want to do a view on what the Nanopore approach offers better than the GRAIL one.
The good news is I've been told I could be honest, so my honest opinion is GRAIL is rubbish, and I speak as somebody who sits within the NHS pilot on that. The reason is it can't evolve. It's a fixed panel, you know, so where is it gonna go? You know, you have to redo it in two years' time. It's expensive. You know, it's $800 a sample, so we batch 16 samples on one PromethION flow cell. So that's $50, you know, for the sample. It's cheaper, it's more diverse, it has better coverage. Obviously, I would say that 'cause I'm developing it. But on the other hand, where's GRAIL gonna go? If we know that the results from it are not good, they're all right, but they're not fantastic.
So they're gonna have to go back, do some more analysis, and produce a new version of it, which may seem good, but at the end of the day, it's still a lot of work, and it's, you know, it's been a long... You're waiting a long time for your profit margin to come in. Whereas, because we're shotgunning it, doing the entire what's actually in the sample all at once, we can deliver an answer much quicker.
Thank you. Well, thank you very much. Before we let you go to a break, I think everyone in this room is really obviously driven by... That you're here because you're interested in our company and our strategy, but I think everyone in this room is also interested in the impact that we want to deliver through this technology. So we've just got one question for everyone on the panel, which is: 10 years from now, what would you like the impact of genomics to be in the world in which you work? So, Jonathan, we'll take you first.
Well, because Nanopore sequencers can be in the field or in any lab anywhere, and that ability to send all the information on antimicrobial resistance and novel emerging organisms, be it pandemic or biosecurity, it'd be having a surveillance network to keep track of these global threats, embedded globally.
Fantastic. Mark?
Good question. I guess I'd like to see it as easy and as automatic in the lab as other revolutionary technologies that we've brought in, like, MALDI and PCR, and where it really provides value best. So I think that every hospital, 10 years from now, should be using Nanopore sequencing for their suspected outbreak investigations. They should be using... I, I hope that 10 years from now, every patient with TB would have a Nanopore sequencing done in order to see if it's drug susceptible and drug resistant. And for these important surveillance systems, surveillance for SARS-CoV-2, surveillance for flu, dengue, and there's other pathogens out there, malaria, where regular, routine Nanopore sequencing would really provide a very important value.
Fantastic. Danny?
Similar to Mark, I would see it as being a given in the clinical situation, not a, "We would like to have this." And as a given, you get information, pharmacogenomic information, that may help you with which drugs to use, personalized medicine therapies, you know, that are targeted to the individual, and all that within, you know, hours of the person coming into the hospital in whatever fashion.
Thank you.
I'm going to be a bit more controversial. I'm going to go for the Steve Jobs approach. I actually think you'll all have one on your phone. And yet, you may have, you may have thought that's not going to happen, but we—who would have thought a blood glucose monitor 20 years ago? Who would have thought iPhone, which is basically a supercomputer in your pocket, and everybody's in this room's got one. I've seen it. I've seen you all with them. So I think there'll be a, there'll be, there'll be a Nanopore sequencer in your phone, and you'll be, you'll be tracking your own health. I seriously—I honestly think that's likely, likely, and that would benefit me, make my life a lot easier.
Well, certainly want every doctor to have one on their phone. We'll start with that.
Yeah.
Okay, wonderful. Thank you. Well, we're going to welcome you downstairs for something to drink and eat very quickly and also to have a look at the technology. And we've got a lovely demo center, as you know, to see the technology. If you could come back at about 3:30 P.M., we would love to see you again then. Thank you.
Cancer is definitely a rising threat worldwide, and the rates continue to rise.
Unfortunately, both my dad and my mom died of cancer. My experience pushed me to try to find some answers.
Cancer is really a disease of the genome. Everybody's genome is personal, and everybody's genome is different. So we need to understand that relationship between the personal genome and the cancer that is attacking it. The only way to do that is to sequence.
HPV, or human papillomavirus, is a sexually transmitted virus, and it infects cervical cancer cells. We want to see why this is so important. What does it change upon integration? What does it change for the genes in the cervical cancer cells as well?
We know that cancers evolve. We try to destroy them by using pharmacological treatments, chemotherapy, but they become resistant. By using long-read data, I have found a novel molecular mechanism by which tumor become resistant to chemotherapy treatments. Probably is one of the biggest challenge for the next, I don't know how many years.
We're doing research on uterine leiomyoma and colorectal cancer. We hope to improve the patient care of both of these very common tumor types. It affects about 70% of women at some point of their lives, so it's a huge burden to society.
Genomics England was set up as a partnership with NHS a number of years ago in order to establish whether sequencing, in particular whole genome sequencing, was of benefit in clinical practice. So conventional sequencing that we're doing currently for standard of care with the NHS is associated with short-read sequencing. But the really novel thing, and the really cool thing about Nanopore sequencing, is that it provides us with really long fragments of sequenced DNA, and that allows us to do things we can't do with conventional short-read technologies.
Without Nanopore sequencing, our work wouldn't be possible.
Nanopore really allows us to see these really large chromosomal changes that affect big portions of DNA, how that can affect the cancer as a whole.
It's been said that all cancers are different. You can't really differentiate between two cancers without sequence.
Future generations hopefully will see cancer with a lot more clarity. With all the information that Nanopore sequencing and other sequencing technologies is giving us, we can eventually put this all together to understand cancer as a whole a lot better.
Over the last 40 years, evidence suggests that vertebrate populations have declined by over 50%.
It is very important for future generations to be able to see all the diversity that exists.
We need to act right now before change is irreversible.
We are based in Quito, Ecuador. We are sequencing the brown-headed spider monkey's genome, and we're part of the ORG.one Pilot Project in order to sequence endangered species. Right now, conservation efforts need genetic diversity information regarding these species, and if we don't have a reference genome in order to develop molecular markers, we won't be able to know what the genetic status of this species is.
Now, we have only five Asian kingfisher in Thailand, so we have to take action as soon as possible before its status is changed from the critically endangered to extinct.
We are currently assembling the data. We wish to use this to select the healthy, unrelated breeding stocks and collect the semen and ova of these breeding stocks for the in vitro fertilization.
As part of the ORG.o ne project, we are working to sequence Tea- tree F ingers. The results we're getting is really encouraging. We certainly have caught at least one genome from one of our individuals, which is a great start to be able to understand the fungi and try and find other populations.
We are working with toads of the genus Atelopus. Those toads are located mostly in tropical forests at highlands along the Central and South America. We have the opportunity to obtain the complete genome with Nanopore technology.
If we can understand how the genomes of those organisms have changed through that process, it provides tools and insights that means that the conservation program itself might be more successful in the long run. The Oxford Nanopore technology is really interesting because it allows sequencing to be done in situ.
The nature of Oxford Nanopore Technologies is very important for us. As a developing nation, we do not have access to other sequencing tools.
Without sequencing genetic data, everything we would be attempting would be ill-informed or uninformed. The MinION that I sequence on is the most adaptable sequencing technology that I've ever used.
We're all working together and making the best of the technology.
Since the genome of several endangered species has not yet been sequenced, the more scientists to join this project, the better for those species.
Good afternoon. Please take your seats as the next session is about to start. Thank you.
Welcome back. So before the break, you heard from Gordon, Rosemary, Zoe, Rich, our esteemed, inspiring, very clinically focused customer panel, which is the ideal introduction for what we're going to be talking about next. So part two of this afternoon, I'm going to be presenting about clinical and diagnostics. I'll then hand over to Lou, who will be talking about our applied industrial markets, followed by John Schoellerman, who'll be talking about our partnership strategy. So with regards to clinical and diagnostics, I'm going to be talking to you about the size of the clinical markets that we are going after, why we think Nanopore sequencing will win, and what our go-to-market clinical strategy is. As an introduction, I'm a medical doctor by background. I qualified, trained, and practiced for a number of years in the NHS here in the U.K.
I've also had the opportunity to work in a U.S. payer, based in Boston for a number of years. Prior to joining Nanopore, I held a couple of roles in government, in the Department of Health and Social Care. What brought me to Nanopore, and what's driven me throughout my professional career, is a real passion to drive improvement in healthcare, a real passion to bring innovation to a step change to the patients that I saw in clinic sitting in front of me every day. So that's what drives me and the team at Oxford Nanopore to embed this technology into clinical and diagnostic markets. I'm going to start by talking a bit about some of the global health trends that we're seeing. In developed countries, the healthcare systems are under increasing pressure, particularly in cancer.
We're seeing many national cancer strategies are now trying to identify cancer at an earlier stage to try and reduce the burden on individuals, families, and systems that happens when there's a later stage diagnosis. We know globally that levels of antimicrobial resistance, as you heard from both Mark and John on the panel earlier, are increasing. These are leading to increased rates of mortality. We know in developing countries, as they build out their healthcare systems, they're eager to adopt cutting-edge technologies that will enable them to make faster diagnoses. All of these are happening at a time when we're still discovering new biomarkers for many major conditions. So as clinical lab networks globally are expanding, we see this as a key opportunity for Nanopore sequencing to enter clinical and diagnostics markets.
So let me talk now about the size of the target addressable markets we're going after for clinical. By 2032, these will be in excess of $120 billion. The largest of these will come as no surprise, it's oncology. And within that, the largest contributor is screening for multi-cancer and early detection. There are multiple points across a cancer care pathway where Nanopore sequencing can play a role. We're currently working with collaborators globally around opportunities for Nanopore sequencing in staging, diagnosis, and monitoring. In human genetics, the target addressable market there by 2032 will be in excess of $18 billion. This includes fields as diverse as prenatal diagnostics, HLA transplant and non-transplant, which I'll come on to give you an example of, thalassemia and newborn screening.
Then in the field of infectious disease, we've already spoken about some examples here. The target addressable market by 2032 is in excess of $8 billion. I'll come on to talk a bit more about our work on tuberculosis, and I hope many of you have had a chance to see that downstairs in action in the L ive L ounge. So why do we think Nanopore sequencing will win in many of these established clinical and diagnostic markets? Let's start with oncology. I've mentioned that there is many governments globally are now trying to identify cancer earlier. That's really driving innovation in this field. And the Nanopore is the sequencing platform that can identify methylation, but also gives much richer data than our competitors. And it's this combination of features which will enable Nanopore sequencing to win in oncology.
In the field of human genetics, this includes people with rare diseases, which spoke powerfully about the impact this can have on families, particularly children, as they try and seek what the underlying diagnosis might be for particular combinations of presentations. Here, it's Nanopore sequencing's ability to do longer reads, to read the dark genome where other platforms can't reach, to identify what those rare diseases can look like. The platform's ability to be both accessible and affordable, and I'll explain where we're using that in combination for HLA typing for deceased donors. Then to look at the fields of infectious disease. We know that antimicrobial resistance is increasing, and here it's this ability, as Jonathan eloquently describes, to create a distributed surveillance network of sequencing platforms.
But it's really the fast turnaround time that Nanopore sequencing can bring that is so critical for clinical teams when they're dealing with patients who are rapidly deteriorating. Nanopore sequencing is a platform that can give you a result in hours, not days or weeks, by which time it may be too late. So as we seek to enter clinical and diagnostic markets, as Rosemary set out in our product innovation section earlier today, we will need to look at the regulatory approach we have for our platforms. So today, Oxford Nanopore has all of our products are life science research tools. These are all used in a research use-only capacity, and that's what we are sharing with you in terms of many of the examples for clinical and applied applications.
As labs take the platform and validate their own tests, these can become LDTs, lab developed tests, and then as we enter more diagnostic, more regulated environments, then we will need to have a more prescribed and documented approach for regulatory approval. This will be either CE-IVD or for FDA approval. So now I'm going to come on to talk about our go-to-market clinical strategy. How are we going to do this? As Gordon set out in his opening remarks this afternoon, we're a company on a transformation journey. We are ambitious about disrupting the market here, and over the last 18 years, Nanopore sequencing platforms have been used for discovery science to drive breakthrough research. That research has translated into humans, where you heard from Danny Miller and Professor Andrew Beggs around how they are forged...
The Nanopore sequencing platform is being used to forge new ground in clinical research. We're incredibly proud of the work that we're doing in Genomics England, which we know is looked to globally as being a real leader about how to embed genomics into health systems. And then, we're also incredibly proud of how this work is being used in Stanford and other places to use ultra-rapid whole genome sequencing, particularly in newborn settings. We're now at a stage where this platform is translating into patient care, into the patient impacts that Mark was describing earlier. This, the hallmark - one of the hallmarks of that is the announcement that we've made this morning about our collaboration with the Mayo. We're also working with St Thomas' Hospital, as Jonathan described.
You will see Nanopore build more of these collaborations with clinical centers of excellence globally. Our goal over the next 10 years is to translate Nanopore sequencing into practice in hospitals, but we won't stop there. The vision for this technology is to translate out of hospitals, out of labs. We want to get into community settings. We want to get into more preventive approaches. So in terms of how we will make that a reality, this is our go-to-market clinical strategy. We've got four pillars here, underpinned by the platform that you've heard Rosemary present the latest updates on today. I'm going to talk through each of these four pillars. Let me start with clinical collaborations. This includes all of the key opinion leaders, the KOLs, who are in the Nanopore community.
These have been early adopters, genomic explorers, customers of Nanopore technology, sometimes for many years. These are our influencers. They publish on Nanopore data, they talk at conferences, but we also engage with them across the company. Secondly, our clinical specialist sales teams. You heard from Rich describe an update on our commercial operations. We have dedicated resource today for our customers today who are using the platform for clinical and translational research. The third pillar here is around our end-to-end diagnostic testing solutions. I'm going to give two examples here, one around TB that you've heard Mark talk about in our collaboration with bioMérieux, and secondly, around the example Jonathan gave for respiratory metagenomics.
And then fourth, with commercial partnerships, we see this being key to how we will scale this technology, and that we will benefit from the presence, market access, expertise that our partner companies, who are specialists in each of the clinical markets that we are seeking to enter. We've identified over 40 distinct clinical market opportunities that we have for Nanopore sequencing, and working with partners will enable us to access them. Underpinning all of these four pillars, obviously, is the platform, and you've seen this downstairs. Last year, we were awarded accreditation for ISO 13485 with BSI. Again, this is a differentiator, and a milestone in our journey for clinical applications.
So let me start by talking about how we are working with clinical academics and clinical scientists globally as we embark on our clinical transformation journey. We form clinical advisory groups with experts in the field, and we draw on their expertise. These are critical friends to us. You can see experts here from the fields of human genetic disorders, also leaders from the fields of oncology, and leaders in the field of infectious disease, who are both early evaluators for us and also critical friends with regards to the applications that and partnerships that we are embarking on. Secondly, you've already heard today about our collaboration with bioMérieux.
In addition to working with them in the rollout of our tuberculosis drug resistance test, we're also working with bioMérieux in the fields of epidemiology to validate Nanopore data on their EPISEQ platform, which is really used for hospital surveillance globally. And then lastly, you can see here that we are working with bioMérieux for 16S sequencing, a sort of targeted approach, which is involving input from development teams both at bioMérieux and at Oxford Nanopore Technologies. And then, I did just want to say a little bit more about the Mayo Clinic collaboration that has already been mentioned today, and I was privileged to spend time at the Mayo with the teams that we're working with earlier this year. We're going to be working with the Mayo on a number of different clinical applications.
The motivation of the teams at the Mayo Clinic is not to demonstrate Nanopore's equivalence or indeed superiority. The motivation of the Mayo Clinic teams is to embed this test into clinical pathways. It will make a difference, and they will roll it out into clinical settings. As a clinician, I've looked up to the Mayo Clinic my whole professional career, so I'm thrilled that we're announcing this today and look forward to other academic collaborations. The first area that we will be working with them on is breast cancer, but there are other rarer cancers that we'll be working with them on, and also in the field of infectious disease. So Mark had some incredibly powerful statistics that he shared about the mortality rate every year for people with tuberculosis. Let me just underscore, this is a treatable condition. We know how to treat it.
The problem is getting the insight about what these drug-resistant strains of TB are most sensitive to, and many of the people who now get drug-resistant TB are in quite rural, isolated countries. So if you can't give them the result and the prescription there and then, you may not see them again. They're not gonna come back in days and weeks for a follow-up appointment. So what's really differentiating about the TB drug-resistance assay that we've developed here is that because Nanopore sequencing's fast turnaround time gives you an answer in under five hours, it means that the clinician is able to give appropriate treatments. This is also an assay that we're going to be able to update. As we learn about new mutations, we're going to be able to continue to evolve and improve this.
Now, we're responding to a global unmet health need here. There are currently no WHO-recommended rapid diagnostics that can detect all resistance to TB drugs in a single test. That's what we're setting out to do. And the World Health Organization supports the use of next-generation sequencing to detect drug-resistant TB, which has grown considerably over the last 10 years, and has acknowledged the role that Oxford Nanopore can play in solving this unmet health need. So we know that rolling out this TB drug-resistance diagnostic test will save lives. This is our first IVD, so we're incredibly proud to be able to share this work with you. This is currently being evaluated as part of the FIND program by the World Health Organization in a number of sites globally. So that's TB.
Then, I did just want to build on the use case for respiratory metagenomics, because it's actually very rare in the NHS that great innovations get copied by other hospitals. It's also incredibly rare to have this funded centrally, particularly in the current financially ischemic environment. So this is testament to the hard work of Jonathan Edgeworth's team and the teams at Oxford Nanopore that have, have been supporting this. One of the additional comments I wanted to make about how this metagenomics approach is being used is that it's... As well as guiding antibiotic prescribing regimes, it's also coming up with rare and isolated cases that clinicians may not have thought about, 'cause typically, you test for a certain thing. But the beauty of this approach is that it's asking, it, it's an open-ended metagenomic approach.
So that means that there may be rare conditions that clinicians would just wouldn't have thought of on your list of differential diagnoses, no matter how long that list might be. For example, the team at St Thomas' have found distributed herpes that they think may have come from blood. They've also found Legionnaires' disease in the water supply. These are things that would not necessarily have been suspected, but identifying them using this metagenomics approach enabled them to be treated, and other patients could then be prevented from that contamination. The Chief Executive at Guy's and St Thomas' is Professor Ian Abbs. He's a clinician. He's passionate about genomics. Every day on an intensive care unit costs over GBP 2,500.
For patients who are particularly complex, that can be in excess of GBP 10,000 per day. So we are currently undergoing a health economic analysis as we seek to roll this out in other sites, and there is interest globally. So now I'm going to come on to talk about two partnerships which are really designed to give you a sense of how we will scale the platform for different clinical markets globally. The first use case that I wanted to share was with a company called 4b ases. 4b ases are based in Italy and Switzerland, and they have a BRCA assay that looks at mutations in BRCA1 and BRCA2 genes. This can be used for screening patients who have a predisposition to breast and ovarian cancers.
Now, as many of you, may have had people in your family, or friends, or even yourself who've ever had to have a test, you will know that the period of time between having the test and getting the results can be incredibly anxiety-inducing. So what we know from a patient experience perspective, is that being able to give the results back of genomic testing on the same day, will make a difference in terms of eliminating the patient anxiety associated with having to wait days or weeks for those genomics tests to come back. This assay is decentralized, it's cost-effective, it's highly flexible, and we have demonstrated concordance with current Illumina approaches. So 4b ases have started to commercialize this in Italy and Switzerland. We're currently evaluating it in a number of other sites globally.
The hereditary testing target addressable market by 2030 is in the region of $12 billion. And then the last partnership example I wanted to give, which again, think of this as a template for how we will partner to, reach so many of these clinical markets, is with a company called Omixon, and it's one of a number of HLA-specific companies that are interested in working closely with Nanopore sequencing. And the reason for that is because the HLA region of the genome is particularly complicated, to read, and Nanopore sequencing is superior to competitors in this market. So Omixon have developed a product that they call NanoTYPE, they are selling this directly. They're using our products in a research-use only capacity, but they're using it to match organs from deceased donors with recipient patients, and they can do this in under six hours.
That means in the middle of the night, when there is a deceased donor that has an organ, it can immediately be matched and within hours, can be transferred to somebody who's on a waiting list for an organ. The ability to better match from their HLA region leads to better outcomes for patients. Again, another example where this technology can be used to save lives. So the key takeaways that I wanted to leave you with in this section on clinical and diagnostics is that we have a substantial opportunity here. There is a target addressable market in excess of $100 billion just for oncology alone. This is the biggest single clinical market we have. We will deliver on this opportunity through commercial partnerships and clinical collaborations, the like of which we've announced today.
We are on a regulatory path to be successful in clinical and applied markets. This will include the research-use only products we have today, also CLIA and also CE-IVD. We already have a dedicated clinical commercial sales team in place, as Rich introduced earlier, to take advantage of the opportunity that we have right now for clinical and translational research. So with that, I'll close, and I look forward to Q&A. Thank you. So next, I'm delighted to introduce Dr. Lou Ludbrook, who will talk about applied industrial markets.
Thank you. Thanks, Emma. Good afternoon. I'm Louisa Ludbrook, VP, Commercial Market Development. From 2016 to 2022, so pre and post our IPO period, I led the global sales organization. I now lead our Applied Industrial Markets team, and we're looking beyond the short-term horizon, as you've heard, to support entry into established and emerging applied industrial markets. It's so exciting to see the progress with the clinical business, and we are at an earlier stage with our applied industrial strategy. But today, I'd like to give you a flavor as to why we're very keen to address some of the opportunities for sequencing in these markets, why Oxford Nanopore has a right to play, and a great chance of winning. So what do I mean by applied industrial markets? Gordon introduced the concept of DNA being in all living things at the beginning of the day today.
We've heard the importance of this in a clinical sequencing setting, so human genetics and human pathogens. But microbes are also present in and around food, crops, animals, and the environments they inhabit. In their 2020, the Bio Revolution Report, McKinsey Global Institute, say that between 2030 and 2040, we should expect to see more than $2 trillion in direct economic impact from biological applications driven by new technologies. But more than half of this, so more than $1 trillion in economic impact, would come from non-healthcare markets, including agricultural, food, and consumer products and services. So with this biorevolution in mind, we estimated a total addressable market of greater than $30 billion in 2032, and this is across 12 applied industrial markets, which we've grouped into three themes here....
Our model captures the value of all testing within the market that requires or will likely require a molecular measurement. This is irrespective of the dominant method that's being used today. The largest TAM is in veterinary agriculture, where we estimate greater than $15 billion by 2032. In agriculture, genomics plays a key role in farm productivity. Genomic insights help livestock and crop breeding decisions and allow detection of pathogens. In the veterinary market, growth in the companion animal market, driven by the humanization of our beloved pets, will follow growth in human clinical oncology and rare disease testing. Food and environmental has a TAM greater than $11 billion. It's weighted towards food safety testing, but includes food authentication, food spoilage, and the environmental applied markets, so wastewater management and biodiversity monitoring for land use management.
The third opportunity is in biopharma, quality control, and safety testing, with an estimated TAM greater than $4 billion in 2032. Growth here is driven by the continued shift from small molecules towards biologics in drug development and progress in advanced therapeutics methods. I do want to talk in more detail later about our unique opportunity in this particular area, but first, let's go back to that big picture vision, that bio revolution. Oxford Nanopore offer one accessible, data-rich platform that can suit a business's life cycle of industrial development. The world is changing. Mature industries are facing global challenges, rising populations, aging populations, climate change, global warming, the emergence of new pathogens, and the geographical spread of existing. Geopolitical and economic cycles impacting long-term planning and supply chains. How we feed and house, how we deliver medicines to a global consumer base needs to adapt.
At the same time, the fourth industrial revolution brings new possibilities for firms, better data integration, leading to differentiated products and services, faster business analytics. We expect to see biological data playing a more dominant role. Why does it matter to consumers? Well, richer biological information will help us better answer these types of questions: Is it safe to eat? Was it sourced from where I expected? Does it contain what it says on the label, so for meat, meat alternatives, or dairy in food? Or using a drug manufacturing example, are there impurities that could impact patient safety? And how fast can my new drug be brought to market?
To us at Oxford Nanopore, the greater than $30 billion in TAM becomes accessible as the use of richer biological data in routine industrial tests becomes the new standard, where novel ways of measuring things that were previously unmeasurable will deliver improved insights, driving competitive advantage for businesses and greater value to consumers. What's needed to make this all happen? There are a combination of factors that will open up this larger TAM for sequencing in the applied industrial markets. The first is deployability. We've heard a lot about this today. Access to richer biology cost effectively across distributed testing networks, as well as in centralized labs. Test simplification. If you get more information from a single method or platform, you reduce not only test complexity, but costs and barriers for setting up new test sites.
In the regulatory climate, industry bodies are warming towards the use of sequencing already, and this will only improve. Market dynamics. A growing number of new entrants seeking to explore the richer data that's now available, matched by the desire for industry leaders to stay ahead. I want to come back to the first point. The move beyond centralized sequencing centers to distributed testing is important, and we've heard this is also a key factor in the clinical testing markets from the panel today. But let me give you an example in the applied markets to make this come to life. In cattle breeding, today, most of the world's cattle, more than 99%, are beyond the reach of centralized testing systems due to a combination of geography and biological diversity.
If a farmer wants a genomic breeding value, they send a sample to a central test house, and it could be as much as 50 days for that data to be returned. If, for the same price, you could test on farm, you would get the result back much quicker. But not only that, in doing so, you'd unlock global cattle biodiversity, which would transform this testing market by two orders of magnitude. There are other examples. Cost-effective, decentralized sequencing will increase addressable testing volumes and TAM. Bigger boxes with centralized costing models just won't work. When we look back at the benefits of Nanopore sequencing that have been shared today by Rosemary, Rich, and Emma, becomes easy to see why we're excited about the applied industrial markets. I'm going to share now three examples of tests where we believe Nanopore sequencing will have an advantage.
In veterinary, the PRRS virus, the porcine reproductive and respiratory syndrome virus, causes huge economic losses in the swine industry. Managing PRRS virus is complicated. The virus evolves rapidly. It has broad genetic diversity. A typical diagnostic workflow requires PCR along with Sanger sequencing.... Classification of the virus, a long amplicon or whole genome PRRS test using Nanopore sequencing would rapidly ID and characterize PRRS virus strains. This will offer higher resolution over current surveillance strategies and would be able to be deployed cost-effectively across distributed lab settings. In food, there are 600 million cases of foodborne illness each year. Salmonella bacteria are one of the most common causes, and during a food product recall or outbreak, quick identification of the root cause is so important to save lives and economic impact.
Sequencing-based methods are now starting to be used instead of traditional, lower resolution, and time-consuming methods to serotyping. Leveraging simple workflows and real-time data analysis, a Nanopore-based test could offer the quickest time to result for Salmonella serotyping. The same data-rich test could also reveal antimicrobial resistance genes of the serotypes. But not only this, using a small footprint platform, the test could be deployed at multiple stages along a supply chain to further reduce turnaround time in surveillance, tracking, and risk assessments. In biopharma viral safety testing, the detection of potential viral contaminants by adventitious agent testing is crucial in ensuring the safety of drugs before release to market. Industry regulations now permit complete replacement of existing methods with sequencing-based methods where applicable. But lack of easy-to-use sequencing methods, combined with curated bioinformatics analyses, has limited uptake in the GMP test setting.
Using Nanopore sequencing and fit-for-purpose bioinformatics, richer data from long reads could be used to unambiguously identify if contaminating viruses are present and return that data quickly. This allows two things: safe products to rapidly progress through to market, and contaminated products to be spotted earlier, reducing the risk of widespread issues, potentially causing manufacturing shutdowns or drug shortages. As our Q- Line platform evolves, we'll support customers and partners to move towards GMP environments. In all the examples I've shared today, it really is the unique combination of features that will allow Oxford Nanopore an opportunity to win in these economically important applied markets. We recognize there will be challenges, and you heard from Rosemary and Emma that we're already developing the platform and system capabilities necessary to support regulated test requirements in the clinic.
The Q -Line device and software will also support partners in applied markets who need to validate tests themselves, or seek approval for end-to-end products and services, be that under GMP validation or AOAC accreditation, or USDA, CDC, FDA, MicroVal, or equivalents. As John will share next, we're formalizing a commercial partner program to accelerate and scale the number of applied industrial application opportunities with startups and established market leaders. It is early stages, but by taking a value-based versus an open platform approach, we seek to ensure we capture a share of the value of a test and not just the price of a flow cell. We are in the early stages, but moving fast, and I'm pleased to share now more about our first partnerships in biopharma QC.
The first is a collaborative partnership with PathoQuest, a leading contract research organization offering sequencing-based testing services to the biopharma industry. The first phase of this partnership was to develop and deliver a Nanopore sequencing-based integration site analysis test, fit for purpose for a GMP setting. The ISA test characterizes gene insertion sites within a host cell genome, and this is a key step in the production of monoclonal antibodies or cell therapy products, as examples. The current tests used might miss some integration sites, and the richer, long-read information from Nanopore sequencing solves this. I'm pleased to announce that the non-GMP PathoQuest ISA test is now available, and a GMP-validated ISA test is expected for early 2024 launch. The second partnership addresses a really exciting opportunity in mRNA-based therapeutics.
We all know the first mRNA vaccines were brought to market rapidly during COVID-19 pandemic, and quality control and quality assurance testing of RNA vaccines requires multiple testing methods and can take up to 50% of the total production time. Nanopore offers the only direct RNA sequencing technology on the market, and this gives us a unique opportunity. Using direct RNA sequencing, you can analyze multiple critical quality attributes of RNA vaccines using a single platform. We believe a Nanopore-based test has the potential to become the dominant quality control method in industry, reducing test complexity and delivering faster results. The regulatory climate supports this, with the WHO actively recommending RNA sequencing for identity testing, and up until now, sequencing-based methods used have always required conversion of RNA to cDNA. To make this happen, we've entered into a collaboration with BASE mRNA facility.
They're a nonprofit, industry-partnered RNA facility with expertise in preclinical vaccine manufacture. Together, we'll develop a rapid, comprehensive, direct RNA sequencing test suitable for industry use, and we're currently in discussions regarding commercial evaluation of this test. To close, we see a greater than $30 billion total addressable market for applied industrial testing in 2032. A combination of factors will shape these markets, including the maturity of technologies as part of a wider biorevolution. Sequencing platforms, such as Oxford Nanopore, that offer industry partners the capability to deploy sequencing tests in a centralized and decentralized product or service setting, will have competitive advantage. It's integral that we continue building internal readiness for meeting the demands of regulated environments, and our regulatory roadmap speaks to that.
We have our first partnerships and a partnering pipeline built using a structured approach to ensure we capture share in the value of tests and not just flow cells over time. Oxford Nanopore offer one accessible, data-rich platform that can suit a business's life cycle of industrial development. Thank you for the time, and I would like to invite John Schoellerman up to the stage next.
Thank you. All right. Hello, everybody. Good afternoon. It's nice to see some familiar faces all in one room. My name is John Schoellerman, and I am responsible for corporate development and business development at Oxford Nanopore. My job here today is to talk about why we've chosen a partnering approach to building in the clinical and applied industrial markets, and also how we're going about that. And I'm gonna do that in four pages, because I know we've given you a lot of content to digest here today. So the common thread running through today is the evolution of Oxford Nanopore from its origins as a very disruptive life science research tools company toward the clinical and applied industrial markets. So our heritage in the tools arena is that we're really built to serve the academic research market. And what does that mean?
These are customers who tend to take a modular approach to technology. They like to piece things together in their own labs. They're very project-driven, and those projects, as you know, are often tied to grants. They can make decisions with relatively few stakeholders. It's efficient for them to get up and running with sequencing, and of course, they're less regulated. So as we move forward into new markets, we can see that we need a new set of capabilities, and that starts with the ability to deliver these, to deliver end-to-end solutions. So we need to make it very, very easy for these customers to use, our technology.
We need to think about this in a different sort of business way because many of these customers run their labs as businesses, and that means that the cadence of sequencing and the operational demands can be greater. There are often more stakeholders around the decision, and that is especially true in clinical settings, as you know, and then, of course, these are moderately to highly regulated environments. We can build some of this ourselves. So you've heard from my colleagues already today about the things that we're doing to build inside Oxford Nanopore to be ready. But the good news is that we can leverage capabilities from a lot of other people who spent years or decades building the resources and the talent to serve the clinical and applied markets. This all points us to the partnership model.
So before we get into the business aspect of this, I just want to paint a very simple picture of who does what inside a partnership, so this should hopefully help level set everybody as to how this works. There are permutations on it, but let's just start with a basic formula. And I'm gonna show Oxford Nanopore roles in blue and partner roles in green. So starting with the lab, we will be providing Oxford Nanopore sequencers and flow cells, which is, as you know, that's where the magic happens, and then also reagent kits that are used to prepare the sample for sequencing. In some cases, the partner will also provide wet lab reagents, where those reagents can enhance the downstream sequencing for the specific application that they have in mind. Looking at the data environment, this is a key piece.
So our vision is to provide a cloud-based, or in some cases, a local software environment to host applications. And so you can see right away that we're taking inspiration from tech leaders like Apple in the way that we're designing and building this model. The partner would provide software to interpret the genetic data coming out of the sequencer and report it out to the end user, and that end user often has very specific needs. So it could be a clinician treating a patient, it could be a quality control manager in a factory, and it might even be a consumer someday. Not yet, but someday. And then finally, the commercialization piece is very important. So of course, we can draft off of the resources of our partners for commercializing new products. That's not just sales and marketing, it's also a set of very specific capabilities.
Sometimes we say it's not just muscles, but it's also brains, because it's relationships with key opinion leaders and medical societies, it's access to governments and NGOs, it's also regulators and, of course, payers who are critical in markets like the U.S. We will stay involved, though, and you can see there's four little blue people on the screen here because as we're providing the sequencers and the consumables, ongoing technical support and service is really important to ensure customer success, but we can do that in a measured and very efficient way by working together with our partners. So this is a model that allows both Oxford Nanopore and the partner to maximize the value of their contribution, and most importantly, it's very, very scalable.
So we can draw on a big universe of potential partners, and you've heard already, I think, from Emma and Louisa and others, about the many things that can happen out there in the world. This is one of the most inspiring parts about working at this company. And as we sit here and we look at all the things that can happen, we have a front row seat to all sorts of innovation. And Gordon mentioned this in his comments as well, this is really the vision of the founders, which is to enable those and empower those genomic explorers, to invent the future on our platform, and we're seeing that happen in real time. So we're drawing principally on two communities for potential partnerships, and the first one is the existing base of Nanopore researchers.
So, as you know, we're past 7,000 active customers now, and there's a subset of those customers in the research market who are very, very focused on creating applications with real-world impact. And, you've seen it 1,000 times, right? There's a chance to create a startup company and commercialize a new innovation, and we can work with them to make that happen. There's also some much larger medical research institutions that are developing clinical applications on Nanopore. We announced today, of course, our collaboration with the Mayo Clinic. We've talked about the work we do with Guy's and St Thomas' Hospital. So this is an important source of partnerships. But then there's another source of partnerships, which is the bigger, global in vitro diagnostics companies.
And we've heard today about bioMérieux, which is a great example of how we can work together so that one plus one is three in scaling up quickly and being successful in applied clinical and applied markets. These are the 12 we've announced to date. This is kind of the first cohort. We're learning as we go, so each one of these is a little bit different, and I'm gonna touch in a second on the business aspects. But these deals are taking different forms, both in terms of our technical collaboration and the economics, because we're learning about the best way to work with other companies for success. But we very much intend to formalize this, as Louisa mentioned, into a Nanopore partner program for clinical and applied industrial applications during 2024 and scale up from there.
So finally, I'll just talk a little bit about the business aspect of this, and I'm gonna caveat this by saying it's early days, and the relationships we've formed are. They tend to be bespoke. And in some cases, we don't even have line of sight on the commercial terms yet, so we have to jump in and start with application development before we finalize the, the value-sharing aspect of it. But let me sketch it out as to how we think about it. We look at what we put into a partnership, and then, of course, we look at what we take out of it. So starting with what we commit to when we sign a partnership, we agree to help the partner with application development, and we also agree to help them get to that totally seamless workflow.
So there's some integration that needs to happen in the reagents that are used before the sequencing and also the software, element farther downstream. We also commit to long-term supply of our products, and we commit to providing that ongoing service and support that I mentioned. So some of this is upfront commitment that we make, and some of it is over the long cycle of the product life. And then we ask, what can we take out of it? What's in it for us? We have to ask that selfish question at some point. That could be a revenue share. It can also come through the form of ongoing sales of consumables, either through the partner or directly. These are different models we're experimenting with.
But the common denominator there, and you've heard this from my colleagues, but I want to emphasize it, is aligning ourselves with the value. We're not just selling ingredients to bake the cake, we're actually helping to bake the cake and participating in the sale of the cake. We're doing all of this then in a framework of financial discipline. That means that we can take what we put in and what we take out, and we can look at the rate of return over time and compare that with a hurdle rate. So we won't go into the financial details here, but it allows us to be confident that the program itself is creating value.
Then when we roll up all the programs, all those shots on goal, we can be completely certain that this is the best way to create value for Oxford Nanopore and our shareholders. That's how we're approaching it, and I'll be happy to take questions about this when we get to Q&A. Let me turn it over to Tim Cowper, who's going to come up and talk next about operations and finance.
Thanks, John. Good afternoon, everyone. Just a brief introduction in case some of you don't know me. So I joined Oxford Nanopore in 2012 as commercial operations director. My main focus at that time was on the commercial launch of the MinION, which we did in 2015. In 2018, I joined the board, and as CFO, I took us through the IPO. So I'm gonna talk about financials in a minute, but first, I'm gonna talk about manufacturing. Right from the beginning, we viewed in-house manufacturing as a key strategic asset and value driver. To that end, we built one of the world's leading production centers for bioelectronics near our headquarters in Oxford. We have 280 employees there, led by Rod, who's here today, and his experienced management team.... So why do we see in-house manufacturing as so important?
'Cause when we conceive a product, we don't just think about the benefits that product will bring our customers. We think about how we can produce it. So the manufacturing team will work closely with R&D and look at the product's manufacturability, how to build it at scale and with high margins, and how to manage it through its life cycle. This focus on operational efficiency has and always will be the main driver of our margin growth into the medium future. Efficiency, along with automation and continuous improvements, is what drives productivity, quality, and resilience. Let's take a deeper look at efficiency. We integrate the electronics, chemistry, and biology at our manufacturing plant in Oxfordshire. Remember, no one else does what we do, so the processes have to be developed in-house.
We can only measure the quality and purity of the inputs when we bring it all together in the flow cell. This is why we quality control every single flow cell that we make and only release the good product. As we refine this process, we're able to make substantial reductions in cost and enhance the quality. So what does this mean for margins? Since we launched the MinION flow cell, we've driven down the cost fivefold. This has resulted in a fourfold increase in gross margins, which is significantly above the 65% medium-term margin target. I just want to emphasize this point. The vast majority of this improvement comes about from the yield of good flow cells, from the components that we put in, not the changes in component pricing or the economies of scale.
So we think we've driven down costs as far as we can on the MinION now. But having said that, we think we can create further efficiencies from recycling components or introducing more efficient electronics into the process. Never doubt that we're constantly looking at ways to further improve margins. The economics of the PromethION and MinION flow cells are very similar to each other. Since its launch in 2018, the PromethION flow cell, which is six times more powerful than the MinION flow cell, has been on a similar development path to the MinION, and over the next couple of years, we expect the PromethION should become equivalent in cost and margin to the MinION. Now, looking at automation. A supply chain is only as strong as its weakest link.
When we first develop a process, we manufacture it by hand, but once we have optimized the process, we automate. This gives us enhanced manufacturing capacity and more consistent output. So for example, simply introducing automation to the production of flow cells enables us to double the throughput, halve the number of manual steps, and halve the footprint. And not only that, because it reproduces itself exactly, we enhance the quality. I should point out here... Just gonna go back one. That we've significantly invested in manufacturing, so we have sufficient capacity to take us through to 2027 and beyond. But as well as increasing the investment in automation, we can also improve the design. So a manufacturing director, and you can ask Rod this, would never choose to put six screws in the back of the MinION like we do.
So if you look at more modern designs, such as the Flongle or Pebble, we don't do that. That makes it-- it makes automation process that much easier. Finally, I'd like to talk about continuous improvement. We focus on continual improvement in all areas of the business. This has been clearly demonstrated by Rosemary and the improvements in quality and output from our flow cells. Continuous improvement in the tech transfer team means that we are constantly implementing small changes in our process and transferring them efficiently to our manufacturing team. As you can see on this graph... Oops! Sorry, I've gone the wrong way. Apologies.
As you can see on this graph, we have significantly increased the output of the MinION flow cell since launch, and as Rosemary discussed, we have a pathway to significantly improving the PromethION flow cell as well, as we work towards three human genomes per flow cell. This will reduce the cost to customers without affecting our margins. And experience tells us that when customers get cheaper genomes, they increase the amount of experiments they run. We are also committed to improving the environmental performance of our products, as you can see, and you can see some of the improvements we made in 2022 on this slide. I'm now gonna move to financials. I'm really pleased to be going last today, 'cause I think it's clear just how much progress we've made since launch, and in particular, how much progress we've made since the IPO.
But we're just at the beginning of this journey, and we're very excited about what's to come... Before I dive into the medium-term financial targets, let's have a look at where we are today. For the twelve months ended 30th of June 2023, we've delivered more than GBP 162 million in LSRT revenue. In that period, we've added 650 customers, giving us a total of more than 7,300 direct active customers, with more than 8,000 sequencing devices run in the period. As a reminder, our growth and profitability is driven by consumable sales, representing approximately 75% of our total revenue. This is important because these are customers running Nanopore experiments, further leveraging our unique platform.
As you heard from Gordon, we've invested in scaling the business and building out our commercial team, but I'm very proud of the fact that we continue to be well capitalized with $485 million of cash on our balance sheet at the end of June. As Gordon discussed today, we've announced an investment from bioMérieux. We welcome a supportive investor, and as a market leader in in vitro diagnostics, they truly understand the potential of sequencing in this field. Turning now to our track record in core LSRT business. As you've seen, we've consistently delivered strong revenue growth. This relentless, fast pace of innovation has been key to expanding the applications our technology can address, and in turn, our customer base.
LSRT revenue has grown at a four-year CAGR of 46%, and gross profit has grown at a CAGR of 51% over the last four years. Gross margin has increased by over 700 basis points to 56.3% at the end of 2022. We achieved this through consistent innovations that drive down our cost of goods, but also by continuing to deliver manufacturing, productivity, and efficiencies. So where's this growth come from? Over the last four years, we've delivered strong growth across all geographical regions. This reflects the scaling of our commercial infrastructure. But the key number I'd like to highlight here is the Americas. Growth over the last four years in the Americas has been at a CAGR of 43%. But if you remember, the underlying growth rate, excluding COVID, at the half year was 72%.
This growing proportion of revenue from America is a trend that we expect to continue. In terms of customer groups, our growth has been driven by our largest S3 customers with a four-year CAGR of 62%. This reflects the market penetration of our high-throughput PromethION devices that launched in 2018. It's worth noting that income from our channel partners or distributors is also doubling year-on-year. And finally, just to remind you, this growth is driven by consumable sales, not by placing machines. And before we turn to look at the financial outlook, I just want to remind you that the growth that we have delivered over the last four years is significantly above the market and our peers, as you can see on this slide. This reflects the growing demand for our technology and our unique commercial model.
Let's now look at the pathway to EBITDA breakeven in 2026. As a reminder, this is consistent with our medium-term target at IPO. This will be delivered by three components. First, continued strong revenue growth. Secondly, margin improvement. And finally, a disciplined approach to expenditure. Let's look at revenue first. You've heard a lot of speakers today talk about the significant addressable market opportunities and the unique features and benefits of our technology. The combination of all this underpins medium-term growth targets. Innovation will continue to be the key driver of growth over the medium term. You heard Rosemary talk about our robust innovation pipeline, which will be key to driving new customer acquisition and utilization. As discussed, a lot of the investments that we are making in addition to our core technology are to provide Q-Line products and end-to-end solutions for customers.
This is so important, particularly for the applied, industrial, and clinical customers. LSRT, clinical and industrial applied revenue are driving a lot of our recent revenue growth. At the moment, this tends to focus on clinical research and information gathering. We anticipate that this trend will continue as this late-stage research transitions into translational clinical sequencing and applied testing. This will represent an increased portion of our LSRT revenues by 2026, which we believe will be 10%-20% of our LSRT revenue. And finally, strong growth in the larger S2 and S3 customers is expected to continue and drive future growth. This significant investment we have made in upgrading the compute towers for PromethION devices will be a key driver in consumable revenue and new customer acquisition in the S3 group. Let's now look at the key drivers of gross margin.
Driving efficiencies is going to be a key contributor to our gross margin. The MinION flow cell margins are consistently above our medium-term guidance of 65%. The expected operational efficiencies that will occur with the PromethION, as the PromethION flow cell matures, will be the largest single contributor to our margin growth. And as I said, we expect that to follow a similar path to the MinION. Another key driver of margin growth is kit yield enhancements. And as I discussed earlier, we have invested in automating the assembly of flow cells and other parts of the production to enable us to increase capacity, lower costs, and benefit from economies of scale, which will also drive margin improvements.
While inflation continues to be a headwind, we are confident that we'll be able to more than offset this through recycling of core components to reduce the cost of goods sold. Over the longer term, future ASIC and electronic programs, which enable us to capitalize on Moore's Law, will continue to push margins up while simultaneously reducing the effective cost to customers. Moving to OpEx. We've been investing heavily over the last few years to grow our commercial and R&D teams. It was a commitment we made at the IPO. We've more than doubled our commercial team in that period, and we've added logistics distribution hubs located in U.S., Singapore, Netherlands, and Australia. Localized technical and customer support are crucial to the customer experience. We now have subsidiaries in 14 countries around the world providing such support.
In 2023, as a result of the end of COVID revenues and this infrastructure investment, operating expenditure will be a higher percentage of sales than in 2022. But going forward, we expect to benefit from this infrastructure that's already in place. Over the medium term, OpEx, as a percentage of revenues, will decline. Now, let's give a little bit more focus on where we're gonna focus our investment. We're gonna be very targeted and disciplined about where we, where we invest, in line with the opportunities that we see and our adjusted EBITDA guidance. Firstly, let's look at R&D. As you've heard here today, innovation is our, is a key driver of our growth, and it's important that we continue to invest in advancing our innovation pipeline to drive medium- and long-term growth.
Investments will be focused on late-stage platform development that is necessary to drive adoption in the clinical and applied markets. We will continue to invest in core platform innovation, where it drives efficiency and margin improvements, but investment will be targeted and disciplined. SG&A. We will continue to add resource to the commercial team, but in a disciplined way, focused on expansion into large and fast-growing markets, and we will continue to leverage channel partners or distributors to access smaller and harder to reach markets. We will partner with others in the sequencing ecosystem to help drive demand for our products and enter clinical and applied markets without significant additional expenditure. So to summarize, we're on track now to hit our medium-term IPO targets.
Over the medium term, we will continue to grow underlying LSRT revenue by more than 30% annually, driven by increasing utilization and driving new customer acquisitions. Secondly, we will continue to drive margin expansion towards our medium-term target of greater than 65% in 2026. Third, we will continue to target adjusted EBITDA break even by the end of 2026. This will be achieved through revenue growth, margin expansion, and disciplined OpEx, as I've just detailed. In closing, I'll leave you with these, with the key takeaways on this slide, and I'd like to say how pleased we are that you're able to join us today. We've achieved a lot since IPO, and looking forward, that pace and intensity is only going to increase. We look forward to providing you with future updates as we execute on these plans.
I'd like now to call Gordon, Lou, Emma, Zoe, and John, but not Odysseas, to the stage. Come forward.
Thanks, everyone. We're nearly at the end of the day. We wanted to give you a chance to ask some questions of the teams who've been talking about the medium- to long-term strategy this afternoon. So thank you. Should we go first, James? Oh, thank you.
Thank you. Thanks, James Gordon from JP Morgan. I'll squeeze in two questions, please. One about an applied or clinical use, which was TB, and I think the spend was $1.2 billion, could be the spend. But just in terms of how would that be paid for? Because I think quite a lot of the patients would be in countries which aren't as affluent. So have you worked through who would pay for that and how that would work, would be the first question, please. And then, the second one was a bigger picture question. So I think for applied sequencing, and/or clinical and applied, you've given a projection for how big it could get longer term. But how will we track how that's going?
Is the plan that there'll be like a line where you will say, "This is how much of our revenues during the period came from a clinical and applied use?" Is that gonna be like an extra line that we'll be able to track?
... and when do you think it, when might you start reporting that out for us? Because that'd be really interesting.
Sure. Let me do the second one first, then, Emma, you do the-
Yep.
TB one. We will at some point, when it's significant, we will define what the tramlines are for applied industrial and clinical, and start to pull it out. There's some clinical going on right now. And then there's a little bit of interpretation. Is research easy, but is translational clinical or is it research? So we've got a little bit of thinking to do. It'll be a couple of years, though, because we're at the beginning of developing these partnerships and these collaborations, developing the assays, and we've got to go through the verification and validation, make sure the ROIs all hang together before that. That's a two-year cycle before you start to get to regulated. But we will ultimately be giving you that level of granularity. TB?
So with regards to TB, thank you for the question. We, as I mentioned, we're currently being evaluated by the FIND program as part of the World Health Organization. So they set the regulations for many of the countries and governments that will be buyers. This represents a new customer segment for Oxford Nanopore. For many of the clinical and applied applications, these are about new customer segments from existing customers. And so, a lot of these governments don't have their own internal equivalents to MHRA and NICE. They do follow World Health Organization guidance, which is why the rapid communication they published in July of this year, where they endorsed Oxford Nanopore's solution, was actually a really important milestone for us. It's also one of the three areas that we're collaborating with bioMérieux on.
bioMérieux, as a global IVD company, do have a lot of marketing and distribution channels to some of the arm's length bodies and governments as customers that we know will be purchasers of the TB solution.
Thank you.
Thanks. Thought I'd sneak in before Odysseas tries to ask his 12th question. I just wondered, a question for Emma on the Mayo Clinic partnership. You gave examples on the bioMérieux partnership. I'm just or assay examples on the bioMérieux partnership. I'm just wondering if you've got some examples in the oncology side of things on Mayo that you could give us.
Examples for Mayo?
Yeah.
Yeah. So for the Mayo collaboration that we've announced today, that's around breast cancer, looking for mutations in BRCA1 and BRCA2. There are other areas of cancer, particularly rare cancers, that the teams there are interested in working on. And we're already collaborating with their teams on infectious disease applications, including TB, that we've also discussed as well. They're also evaluating that, so this represents the beginning of a number of collaborations.
This is Scobie Ward from SWIM Capital, and I was hoping you could comment on the threat of new entrants into the sequencing market, you know, which is kind of a three-player market today.
I think we can divide them into two buckets. The legacy existing market, sequencing by synthesis. I hope one of the takeaways today is black and white is no longer worth looking at once you've got color, particularly for those of you who are British, who like snooker. So there is a plethora of incumbents as Illumina goes off pattern on the optical sequencing by synthesis space, with all the limitations that have been articulated today. On the native small, long, ultra long-read side, Nanopore sequencing, there's us in the marketplace. Roche have a Nanopore play, but we haven't seen anything yet. It's imminent. It's been imminent for the last four years. So we feel that our highly differentiated platform has significant first mover advantage. We are now eight years into the marketplace, and there hasn't been an entrant.
It's partly because it's really difficult what we do, and partly because of our evergreen IP portfolio, we have managed to defend our position and block entrance.
Dave, then if we could take the Berenberg team after you, that would be great. Thanks.
Thank you very much. So David Westenberg from Piper Sandler. So I think this question is probably a little bit more for Tim, but I think as others can talk, hop in there, too. But on the twofold decrease in price and manufacturing, then the fivefold increase in output, should we assume kind of the twofold decrease in manufacturing is kind of what you take in gross margins, and then the fivefold increase in output, kind of what you give the customers back in terms of a cost per gigabase reduction in price? And if you do think that you'll be giving them this cost reduction in price, what does that say about the elasticity of demand? Where are we at in that elasticity of demand curve?
I get that's kind of abstract, but, you know, anywhere you can go with that. Thank you.
Yep.
Shall I start?
Yeah, go on.
Go on. Yeah. So, so the reducing the effective cost to the customers by getting more genomes or more data out of the flow cells is important because it makes the customer more efficient, and, and they can obviously benefit from that.
It is, the important point I'm trying to make, though, we don't have to pass that to our customers, but if we have price pressures, that's how we can deal with them. In terms of the improvements that we can make, these are internal. Rod and his team will continue to work tirelessly to make sure that we test everything and improve it, and improve it, and improve it. And that will be something that will not stop within the culture of Oxford Nanopore. It's very core to what we do.
Can I just talk about elasticity of price? So you have to completely separate out the life science research tools market from applied, clinical, and applied industrial. There is the target of a $100 genome that everybody talks about, but that is for a very small segment of the market.
You can't do a $100 genome on a MiSeq. So on the other side, with applied market testing, the cost per test makes it very, very competitive, the pricing we have. So there's this almost 10- to 100-fold change in the elasticity, depending on the application area. So people can always just conflate it all into one, and you really do have to separate it out. Absolutely, we want to pass one genome to four genomes, that Rosemary showed, onto the customers in population scale genomics, because it drives more genomes being done on long native DNA, which increases the value proposition because of the biological insights it generates. Which generates translational to clinical, to community, that Emma showed in her slide, where those are per test types of pricing, and it's a very different value proposition.
We, you know, we are uniquely positioned to have form factors that take us from high throughput population scale research through to these potential point-of-care end markets as well.
Lisa Clive from Bernstein. Do you have any views on the proposed FDA regulations of the LDTs? Could this potentially hold up development of tests on the platform? Or there's a lot of mention about getting IVD approval, so how, how should we think about that, if it happens?
Bingo. I have very strong views on that. There are 10,000 LDTs out there, unregulated today. By 2029, they all have to fall in line with the new FDA regulations. I had the great pleasure of being head of Abbott Diagnostics Blood Glucose Division when Abbott was fined $330 million. And myself and the current team at Abbott, at MediSense, moved to Nanopore. We rewrote the design control manuals for Abbott Diagnostics 15 years ago. So all those people work at Nanopore, and the fact that that 2029, we will have to move from our EU LDT clearance waiver. We are focused on getting the regulate-- We were going to do this anyway, by the way, irrespective of whether the regs hit us or not.
By having the regulated Q -Line product from the outset, it's going to be a short step for us to flex to whatever those requirements are. Those legacy systems and those 10,000 LDTs, or whatever the right number out there, that's a really complicated job. And Miles White at Abbott fought the FDA for many, many years until they forced him to make the legacy systems come up to speed, and that's what they've said in that regulation. It's a really positive benefit for us. As I said, I come from a point-of-care regulator background, and irrespective of what we could get away with, we were always going to make these platforms highly regulated, and the manufacturing of the consumables for that marketplace.
Thank you. In the middle ?
Yes, this question is for John. The Nanopore partner program, I was curious that in the future, could you move that downstream in the sense of it, could it emulate like the App Store, and you partner with what you call genetic explorers? So in addition to you selling them the tool or the fishnets, you can participate economically in the value they generate for their own businesses.
Yeah, it's a great question. That's very much the vision. There are some aspects of this that are different. For example, we'll stay involved in making flow cells. They're consumables that are real things that need to go into a lab. So that strategic asset we have, which is the production of those key pieces of the ecosystem, will always be part of the model. But absolutely, we want to make it as frictionless as possible for people to innovate on the platform, and then commercialize applications on the platform.
And we're here to help them do that, and one of the key initiatives in the company right now is to make sure that what we're building from a technology standpoint, and also the business overlay, are kind of common denominators that can serve many end markets at once, so we can be efficient as we scale this up. So yeah, absolutely. We're taking our inspiration, as I said, from the tech leaders who've done this before us.
If we could have mic for... Oh, you've already got one. Thank you.
Blanka Porkolab from Barclays. I'm going to try and ask a question that already has been asked, but maybe a slightly different way to see if we'll get an answer. I guess, y ou know, we're trying to understand what percentage of your revenues are related to the applied markets or the clinical segments currently. And I guess just adding to that, is there any area that you think will be easier to penetrate going forward?
So if we define clinical as not discovery and translational, then I would say very little. The gray area is translational, sometimes can be used in routine clinical information gathering for decision-making, but not decision-making. If you make the clear distinction, if it's a test that you make a decision, informed decision on, then very little today. And it's too early to figure out what that looks like, as we're at the beginning, in the foothills of these, the tests, the ROIs, and the potential revenues that they will generate. But we will work towards giving you that sort of guidance in the future, just not yet. Still not answering the question.
Sorry, just one more follow-up. Just really helpful on the bridge to EBITDA. I guess, how should we be thinking about the trajectory to break even? So do you expect it to be fairly linear year over year, or is it more back-end loaded?
Yeah, the compounding revenue growth at a higher rate than the, I'd mentioned the operating expenses are gonna be a higher proportion this year, so it will be from 2025 and 2026 onwards. A lot of it's gonna happen then, but 2024, you'll really see the effects of the compounding revenue.
I think we've got time for one or possibly two more, Charles. Oh. Go next. Go Charles first, and then I'll go-
Okay. Thanks. Charles Weston again from RBC. Just on the $150 billion TAM, obviously, you've talked about the various agreements that you have, and you want to capture some of the value of the, of the test rather than just selling flow cells. It looks like you're, you know, at the cusp of launch for PathoQuest, arguably even for TB. So where should we think about the value of that $150 billion? How much of that $150 billion could potentially accrue to Oxford Nanopore as your total addressable market?
If we think about how that flows through, and you think about 10%-20% in 2026, and if that's some of the value of the test, not just the flow cells, does that mean that actually you get a much higher gross margin if it's royalty-based or, or some sort of value share?
John, do you want to try? We've been doing some modeling on-
Sure, I can take the first part and then maybe-
I can do-
You want to comment on the gross margin point. So, it is early days, but I think as Louisa said, it's early days, but we're moving fast. So we have this first cohort of partnerships and, and we're figuring out the right way to work with people, both technically and, and economically, to your question. So I think we can, we can say what it isn't. And it's not a single-digit technology royalty tied to patents and off you go. It's, it's collaborative, it's, it's about working together to build a new product and share the value. There will be different, I think, levels of value sharing according to different opportunities. And I say that because there may be some areas where we want to lean in a little bit more and others where we want to lean in a little bit less.
But it also won't be. The other thing we know at this point, it won't be, is a kind of biotech style out licensing or exclusivity for fields of use. We're taking very much a platform approach to this. The spirit of this is that the platform is open for business, and it's a level playing field for all the innovators to come work with us. So I think it's just too early, Charles, to say how that measures up in the end in percentage terms, but we are intent on capturing the full value of that fishing net that we've built because we think it's the best fishing net in the business.
On the margin front, it's not even clear if those terms are the end-user price points or they are... It's just a big number from Deci Bio, right? What we will show you is how a per test model will work, because it may be that there are very few samples, but the reimbursement price point is high enough that five samples per flow cell is a viable commercial value proposition. At the other end of the spectrum, if we are going to do very low-cost TB, we may want hundreds of samples. So in each case, it'll be carefully considered, and we will talk about how that per test model works.
But it will be per test, because we have that closed loop, as Apple do, that our customer, the innovator, is bringing something to the table that's unique that Nanopore can address, and we have invested and developed the platform, and between the two of us, we will work up this profit share model. And that, this, that's, that's what this is all about. So we have not. I can't answer your question right now, but you'll see with real work examples as we get to those points on the timeline. The return we're gonna focus on is the net margin, because the models will vary partner to partner. The thing they'll all have in common is there'll be a transfer price for flow cells.
And so, I'm pleased Phil, my VP of Finance, is here 'cause he's gonna have to work out IFRS 15 on this one, and how we deal with that.
A last question in the back.
Thanks very much for taking my question. Yifeng Liu here, for HSBC. Just one question on your potential outlook in China in terms of the growth prospect. How much have you baked in, in your midterm guide, medium-term guidance?
Do you want to take that, Tim?
Yeah. The research and the and what our customers are doing in China is really fascinating, and there's some really great use cases coming from that part of the world. The regulatory hurdles that are appearing give us a degree of caution. We pay a lot of attention to who our customers are and what they're actually working on, and we believe we can still expand in that market, but we're just gonna have to tread cautiously. We've all been eagerly reviewing the stuff that came out this week, and we will continue to update ourselves on a daily, hourly basis. We're optimistic but cautious.
Thank you so much. I think that's all we've got time for in terms of Q&A, but obviously we're going to be mixing, hopefully at drinks afterwards. So you're welcome to come and ask any of the teams. So I think you guys are free to go.
Thank you.
So, you heard today from Rich talking about the near to medium term with Rosemary, and you've heard after the break from the medium to long term. But there is, of course, a sort of very long-term future to nanopore sequencing, and we know what some of that looks like, and some of it is unknown, and some of it is probably unknowable, because this is a completely transformational technology in our opinion. So to close today, we went and asked some of our customers, some of our users, what they think the pathway to that future of genomics looks like, and so we just wanted to leave you with some of their words today. Over.
Way back in 2004, 2005, we had found a hypervirulent strain of Staph aureus in the hospital. So we wrote a grant to send it away for Sanger sequencing. A year later, and about GBP 70,000 later, we received our sequence. Fast forward 10 years, I can do the same work in less than 24 hours for less than GBP 500. We really think that in the future, sequencing can go all the way and solve some of the challenges that we have.
I can't help but wonder how many new explanations we're gonna have for some of these complex diseases that we don't understand right now.
Alzheimer's disease affects millions of people worldwide, over 5 million people in the U.S. alone. We need to be able to have the power to say that a specific variant is associated with disease. The dream would be to identify a mutation, to be able to suggest a drug or design a drug that targets that mutation, and then to be able to slow or stop disease.
The disease that I work mainly on is a disease called ankylosing spondylitis, and we have only just, through sequencing in the last couple of years, worked out how it operates. I think we're going to see that occur across most common immune-mediated diseases over the next five to 10 years, and that will be incredibly exciting because you'll then be able to work out what was the environmental agent that triggered the disease, and then that raises the possibility that you might actually be able to prevent the diseases altogether.
Here at Johns Hopkins University, we're trying to develop new tools, new methods that use the latest sequencing technologies to explore human disease. I'd like to take a single cell. I'd like to just be able to sequence all the DNA from that cell, all the RNA from that cell, and all of the protein from that cell, and characterize that exact cell completely, but do that on millions of cells from a given sample to really understand everything that's happening. Just do that just for like, per person.
Six years ago, I set up a genomic facility in The Gambia because we had none. I would like to see sequencing decentralized. If we have more sequencing available, especially in our region, in low- or middle-income countries, not just in Africa, it will save lives.
I got some grant to train people in Southeast Asia and also train people in U.K. to do fungal genome sequencing. If we can train medical students, for example, they can learn from the beginning to the end, and then they can train other people also. This is what I hope in the future.
I remember at school, I was really grateful to have the opportunity to use the MinION. So many people my age don't get that opportunity, and I think at GCSE level, if it was introduced, it would inspire more people to get involved with science. It definitely inspired me to go into medicine.
Rare diseases is a big challenge. We would like to finally get the diagnosis in 100% of cases, but we need informatics, we need genetics, we need biochemistry, biological and medical doctor, and all have to work together. I think that this way, we'll get fantastic results.
My hope is that in the very near future, we can really sequence every patient, any species, microbes from your gut or from the environment, and democratize sequencing for everyone and for any application. These sorts of ideas sound like science fiction, but they're not. They really are possible. Predominantly, it's about building the healthcare systems around genomic medical services. So all of our healthcare apparatus and treatments are actually focused on people with established disease. Genomics is going to flip that on its head, so we're going to get to the situation where it is actually possible to be preemptive and focus on early disease or even before people develop disease. And wouldn't it be an exciting outcome for us all?
I think what we've achieved so far, we need to just keep going, and it will make a huge change. The future is not that far, and the accessibility of sequencing will be fantastic.
Sequencing can help us solve some of the biggest challenges that mankind are facing now. Whether it's climate change, it's biodiversity, antimicrobial resistance, or new emerging pathogens, sequencing will be involved in solving all of these problems.
I don't actually have any closing remarks other than Steve Jobs said, "If tomorrow was your last day, would you go to work? I would." We see a story like that every single day. I mean, last week's was intraoperative brain surgery, and I haven't looked today 'cause I've been busy here. I just want to, I want you to go away with one thing, if there's one thing you can remember. We have talked about the most complex, the hardest to diagnose genetic disorders facing humanity today, and Nanopore can unpick them, unlock them. So the easy-peasy stuff that's dominated by mainframes today, we can do that already. But there is hundreds of millions and years of capital poured into those markets. So by starting at the other end of the spectrum, and the panel you heard today, whether it's rapidly drug-resistant, mutating infectious diseases...
I do want to point out, Mark, I thought you did a brilliant job. We are not going to displace panel PCR tests. Nanopore sequencing will be an adjunct. It'll be another tool in the armory, whether we're talking about AMR drug resistance in critical care, multimodal genetic disorders, hard to diagnose, neurodegeneration, mental health. It's funny how there's no drugs around that, because we can't get at the biology to understand it, to start to think about how we might develop drugs. This platform will fundamentally change the way in which we see healthcare and biology. Every single week, something special like that happens from that video. And with that, there are drinks downstairs. The whole team are here. Please ask questions and have a drink. And I really wanna thank you for giving a whole day of your very, very busy schedules to us.
Thank you very much. Thank you.