my students use ideas from my class on business models to develop a business model for ion proton's DNA sequencer. This sequencer uses semiconductor technology to read an organism's DNA sequence and is faster and cheaper than existing sequencers. This presentation describes the value proposition, customer selection, method of value capture and other aspects of a business model for Ion Proton's DNA sequencer

1. Ion Proton Sequencer
Jay Wyn; Liang Zhu; Yutong; Swathi; Magdeline; James

2. Ion Proton DNA Sequencer

3. Content
• Introduction
• Value Proposition
• Value Added – Cloud Service
• Value Capture
• Strategic Control
• Potential Market

4. What is DNA Sequencing?
• Process of reading
nucleotide bases in a DNA
molecule
• DNA Consist of four type
of bases:
• Thymine, Adenine, Guanine,
Cytosine
• Current DNA Sequencing is
called Next Generation
Sequencing (NGS)

5. Source: http://bioweb.wku.edu/courses/biol350/dnasequencing13/review.html

6. Why DNA Sequencing?
• Study of building blocks of humans and other organisms
• Study of bacteria virus, leads to better cure and
prevention
– 2011, outbreak of e-coli virus. DNA sequencing was used to
better understand traits like toxicity and immunity to which
antibiotic.
• Future, help with early detection or early warning that a
patient may have a certain disease
• Becoming very cheap, so it is becoming affordable

7. Key Players
Roche’s 454
• GS Junior System (Late 2009)
• GS FLX+ System (2008)
Illumina
• Illumina MiSeq (2010)
• Illumins HiSeq (2010/2012)
Life’s Ion Torrent
• Personal Genome Machine (PGM) (Late 2010)
• Ion Proton (2012)
Oxford Nanopore Technologies
• MinION
• GridION

8. Comparison
• Roche’s 454
• GS Junior, GS Flx+
• Uses Pyrosequencing
• Illumina
• Miseq, Hiseq
• Uses Solexa Sequencing

9. Ion Proton
• PGM, Ion Proton I
• Uses Semiconductor Sequencing
• Measures the hydrogen ion production during
polymerization of the DNA

10. Sequencing by Synthesis
Ion Torrent H+
Detection using an
Ion Sensor
Illumina and Roche
Pyrophosphate
Detection Using
Optics

11. Technology Comparison
• Detection of ion release is
simpler and faster than
optical method from 454
Sequencing and Illumina
• Ion proton uses
semiconductor, thus is able
to improve at a high rate in
the future
314 Chip 316 Chip 318 Chip Proton 1 Proton 2
(1.2 Million (6.2 Million (11.1 Million (165 Million (660 Million
Wells) Wells) Wells) Wells) Wells)

12. Moore’s Law

13. Threats
• Oxford Nanopore Technologies
• MinION (Disposable), GridION
• Uses nanopore sequencing, which measures
electric inductance of the nucleotides

14. Strategy Canvas for Life Technologies
5
4
Scoring
3
2
1
0
Ion proton
Factors of Competition illumina's HiSeq
2500
Fair comparison of Illumina’s HiSeq 2500 and Ion proton:
•Same time of release (10th January 2012)
•Both claims to sequence an entire genome

15. Value Proposition
Cheaper Faster Smaller
Ion Proton

16. Value Proposition
Cheaper Faster Smaller
Machine price: IP: 2hrs
IP:149K Vs IP: Benchtop sequencer
vs HiSeq2500: 27hrs
Hiseq2500:$740K
Seq price/genome:
IP:1K
vs Higher throughput
Hiseq2500:$3-5K

17. Customer Selection
Universities
Research
Centres
Final
User
Immediate
Government Users
vs
Private
(E.g. govt funded genome centres)

18. Customer Selection
Clothes,
furniture,
Bio-synthetic Consumer Targeted
Drug
products drugs
detergents companies
Bio-Fuels, Alternative
Fuels from energy Other
Virus Researchers Produce human-
compatible
proteins from
other organisms
More resistant
crops  better Agriculture
yields Genetic
Engineering

19. Drug Development:
Traditional Value Chain
1990’s Value chain : Step-by-step
Improved value chain: Simultaneous activities

20. Role of Ion Proton
DNA sequencing with Ion Proton make target discovery faster
 faster product development.

21. Value Chain Of Drug Development
Pharma

22. Global Market Analysis

23. If genome sequenced for < $1K…
App
Developers Seq.
Techniques
Seq.
Firms Seq.
Instrument
New SHAKE
Entries – Improvements
OUT?
competition

24. Emerging Needs
Head towards…
Data
Processing: Hardware Capture
Analyzing + market share
and to reap
interpreting SERVICE benefits from
services network
effects

25. Cloud Service
Ion Reporter
Future Multisided
Development platform
Enhanced
Data Mobility

26. Ion Reporter
• Import, annotation, analysis, archive
 Reduce workload, shortening time
 Flexible, reproducible
Integrated
Annotation
Ion Reporter
Sequencing Configurable
reads Analysis
Archiving
Standard

27. Ion Reporter
• Cloud based
 Cost-saving, highly secure
• Open source
 Allows inspection and improvements
• Aim to create Standard
Speed, Simple, Scalable, Secure
Standard

28. Multisided
platform
• Clients --Our services -- App developers
• Dynamic Eco-environment
 Enhanced communication
 Targeted problem-solving
• “One-stop shopping” for sequencing users
Clients App developers/ Bioinformatics
companies
Network Effect

29. Enhanced
Data Mobility
• Sharing the info with greater ease
- Apps for desktop, laptop, iPad
• Monitoring progress; noticing results

30. Future
Development
• Cooperate with Clinics and Hospitals to
build a non-profitable database for
treatment and research
• Improve healthcare services
• A one-stop workstation for our clients

31. Value Capture
1. Traditional
method, Short- 5. Lisciencing/
term primary Commision.
Sales Cloud Long-term goal
Maintenance
4. Accept
2. Free for a few request for one-
times and charge time or multiple-
subsequently Service time sequencing
3. Rent out the
machine to
targeted
customers Rental

32. Value Capture
Sales/
Upgrades • Cheaper, Faster, Smaller
Machine Cost per Sequencing Throughput
Cost (USD) Run (USD) Run-Time
Ion Torrent’s Ion
149k 1000 2-4 hrs 10 Gb
Proton I
Ion Torrent’s PGM
50k 750 2-3 hrs 1 Gb
(318 Chip)
Illumina Hiseq
740k 23,000 27 hrs 120 Gb
2500
Illumina Miseq 125k 965 1 day 4 Gb
Roche 454 - GS
150k 6000 23 hrs 700 Mb
FLX Titanium XL+
Roche 454 - GS
500k 1000 10 hrs 35 Mb
junior

33. Value Capture
1. Traditional
method, Short- 5. Licensing/
term primary Commision.
Sales Cloud Long-term goal
Maintenance
4. Accept
2. Free for a few request for one-
times and charge time or multiple-
subsequently Service time sequencing
3. Rent out the
machine to
targeted
customers Rental

34. Cash Flow
End user
$
Tranditional
Cloud
Activities
$ $
App developers

35. Strategic Control
Nature
• New entrants tend to utilize new
technology
• Semi-conductors DNA Sequencing
technology is hard to reverse-
engineer

36. Strategic Control
Patents

37. Potential market

38. Applications
Mitochondrial Disease Clinical research
Better diagnosis Better result
Replace the current Improve the quality of
invasive and costly researches as well as
muscle biopsy test. provide new directions
for researching.

39. Mitochondrial disease
• Mitochondrial disease
– A group of diseases which are characterized by
problems of decreased energy production.
• Muscle biopsy
– Invasive & costly (as high as $50.000).
– Complicated & time-consuming.
– Cannot produce absolute results.
• Benefits
– Cost: $1k + analyzing cost vs. $20k-50k.
– Time: A few days vs. 3-4 weeks.
– Quality: more absolute results.

40. Applications
Mitochondrial Disease Clinical research
Better diagnosis Better result
Replace the current Improve the quality of
invasive and costly researches as well as
muscle biopsy test. provide new directions
for researching.

41. Clinical research
• Improved quality
– Combine test results with test subjects’ genetic data to
derive more detailed results.
• Provide basis for personalized treatment.
– Build up a gene database that stores more than the raw
genetic data for future researches.
• New directions
– Discover the existence of previously unknown
mutations as origins of disease.

42. Clinical research
Patient Researcher
More patients More data
= =
More data More researchers
Network
effect
Research quality App developer
More data + tools More researchers
= =
Improved quality More app developers

43. Thank You