Single Cell & Spatialomics: What Does The Future Hold?

THE COWEN INSIGHT

Our deep dive offers important new insight into the tech/opportunity for single cell and spatialomics and explores the factors critical for companies to generate meaningful future value. The shift from bulk analysis to single cell spawned a $1B market, but it’s just scratching the surface. Enter new spatial single cell tools & the TAM expands to >$10B. Macro, new entrants & a lack of Dx impact conspired to send stocks and sentiment lower. Herein, we explain the technologies with fresh insight, assess the market opportunity, and distill the key factors most likely to generate meaningful future value.

THE SHIFT FROM BULK TO SINGLE CELL ANALYSIS

Sequencing tools can be used to provide information on DNA, RNA, and proteins (collectively referred to as ‘omics). These sequencing tools provide cellular insights into disease biology, driving drug discovery and R&D.They have undergone a shift from delivering an “average” read across billions of cells (bulk sequencing) to ones that drill down to provide rich information on just one cell (single-cell sequencing).This shift in R&D from bulk ‘omic analysis to single cell began in earnest over 5 years ago. More recently, the utility of single cell has been enhanced by adding a spatial context.

INVESTMENT OPPORTUNITY IN SINGLE CELL ANALYSIS

Interest and excitement from the scientific and investment communities have been palpable. However, investor sentiment has turned sour in the past year, given slowing sales growth and an increasingly competitive environment (notably spatial).

Collectively we remain enthused about the opportunities given the scientific rationale/benefits and revenue potential. The near term (2023) for spatial is less clear due to macro environment and a plethora of new launches). However, through 2025 we expect solid market growth (~25%) given growing ‘proof’ (publications) of the utility/value plus familiarity with the technology. Our survey reflects a reacceleration (back >20%) for single cell ‘omics.

PROPRETARY DATA IN THIS REPORT

We surveyed 30 lab directors across academia to assess their views on single cell transcriptomics and spatialomics. We supplemented these with diligence from >20 KOLs (across academia, biopharma, and clinical). We also include results from our Biopharma R&D Leader Survey (n=50) and worked with a leading consultant to further support our market sizing and growth forecast. In addition, we dug into the spatial platforms and broke them apart to reveal similarities and differences between vendors and to better understand the opportunities and limitations to drive performance and cost improvements.

KEY TAKEAWAYS

For single cell transcriptomics, diligence is more positive than what’s portrayed in recent results, with our survey pointing to a demand acceleration. For spatial, the survey reflects a favorable view regarding the strong utility of the new platforms, with growing budget allocations to spatial.

WHAT TO WATCH IN SINGLE CELL ‘OMICS

  1. Several factors can drive a growth inflection, hence watching these/assessing them will be key
  2. Investors are focused on seeing a stabilization of quarterly results, particularly given the underlying causes of the weaker recent trends have not been well understood
  3. With ‘boxless’ players pushing ahead, it will be important to monitor their progress and what type of traction they can generate.
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