Next-Generation Sequencing in Drug Discovery Market Size, Share, Growth, Report 2025 to 2034

Next-Generation Sequencing in Drug Discovery Market Size and Growth 2025 to 2034

The global next-generation sequencing (NGS) in drug discovery market size was valued at USD 1.45 billion in 2024 and is expected to hit around USD 4.27 billion by 2034, growing at a compound annual growth rate (CAGR) of 18.3% over the forecast period from 2025 to 2034. The next-generation sequencing (NGS) in drug discovery market is expected to grow significantly owing to its ability to deliver high-throughput genomic data, accelerating target identification, biomarker discovery, and personalized medicine development. Rising prevalence of complex diseases like cancer, increasing R&D investment by pharmaceutical companies, and integration of AI-driven analytics for precision drug design further support its growth. NGS enhances speed, accuracy, and cost-efficiency across early-stage drug discovery pipelines.

The next-generation sequencing (NGS) in drug discovery sector is fundamentally changing pharmaceutical research and development by providing high-throughput genomic sequencing analysis and allowing for quicker and more accurate identification of drug targets and biomarkers. NGS improves the drug development process by providing: characterizing potential drug targets and biomarkers, de-risking targets in the preclinical stage, using predictive modeling, machine learning and artificial intelligence tools for variant interpretation, and using biospecimens sampled by traditional medical methods and processing them with a variety of sequencing options. The success of the NGS drug discovery market can be attributed to higher demand for personalized medicines from pharmaceutical companies, an increase R&D spending by pharmaceutical firms, and the need to integrate predictive modeling, machine learning, and artificial intelligence for modeling. Pharmaceutical firms and sequencing platform firms are beginning to collaborate with each other and with research institutions, increasing the potential for innovation in how drugs are discovered. As the cost to perform NGS increasingly decreases and the access improves, it is becoming a disruptive technology that will lead to more precise, rapid, and effective therapeutics being developed for medicines that are more patient-specific than previous versions.

Next-Generation Sequencing in Drug Discovery Market Report Highlights

• By Region, North America has accounted highest revenue share of around 38.7% in 2024.
• By product type, the consumables segment has recorded revenue share of around 48.5% in 2024. The consumables segment leads due to recurring demand for reagents, kits, and cartridges required in each sequencing run, driven by expanding research activities and frequent use in genomic workflows.
• By technology, the targeted sequencing segment has recorded revenue share of around 39.6% in 2024. Targeted sequencing dominates as it offers cost-effective, high-precision analysis of specific genes or regions, making it ideal for biomarker discovery and targeted drug development in personalized medicine.
• By application, the drug target identification segment has recorded revenue share of around 37.2% in 2024. Drug target identification commands strong share due to its critical role in early-stage drug discovery, where NGS is used to pinpoint genetic drivers and molecular pathways of diseases.
• By end-user, the pharmaceutical & biotechnology companies segment has recorded revenue share of around 46.2% in 2024. These companies lead adoption as they heavily invest in NGS for high-throughput screening, target validation, and companion diagnostics to develop precision therapies and streamline R&D processes.
• By workflow, the sequencing segment has recorded revenue share of around 41.5% in 2024. Sequencing is the largest workflow segment due to its central role in generating genomic data, with increasing use of platforms like Illumina and Oxford Nanopore in both exploratory and clinical research.

Next-Generation Sequencing in Drug Discovery Market Growth Factors

• AI & Machine Learning Integration: The combination of AI and machine learning with NGS has the potential to revolutionize drug discovery through automated genomic data analysis and predictive modeling. In 2022, the NIH established the Bridge2AI program using $0.13 billion intended for NGS development within the AI domain, creating AI-ready datasets to improve AI-assisted or AI-based decision making in genomics. In/on 2024, the CDC’s DST division implemented pilots implementing AI for public health genomic surveillance, a process where machine learning achieved a reported 40% increase in interpretation efficiency. More specifically, machine learning algorithms can now assist in predicting gene-drug interactions and possible consequences of mutations more quickly than traditional bioinformatics methods. This can ultimately improve target identification and allow for the development of more precise personalized medicines. AI has been capable of assisting in the identification of sequencing errors and/or improve quality control. There are now several regulatory initiatives looking into how the outputs from AI in genomics could be validated in clinical trials.
• Rapidly Expanding Sequencing Technology: The explosive expansion of sequencing technology has allowed costs and timelines for whole genome analysis to decline. In 2023, NHGRI allocated funding to new platforms including nanopore and graphene-based sequencing to achieve the $1000 genome target. These systems have now grossed turabase level output, facilitating improvements in drug screening in large populations. Third generation accuracy has become achievable with platform improvements that support both clinical and research purposes.
• Expanding Burden of Chronic Diseases: Chronic diseases including cancer, cardiovascular disorders, and diabetes account for over 70% of deaths globally, leading to an increase in the utilization of NGS for therapeutic discoveries. In 2025, the National Institutes of Health (NIH) Human Pangenome Reference Consortium allocated $0.029 billion in funding to improve mapping of disease-related gene variants, particularly across under-represented global populations where treatment pathways may differ. These initiatives help researchers develop treatments that work across diverse genetic backgrounds. NGS can detect mutations associated with diseases, and develop personalized therapies based on the sequencing data. Continuous NGS provides real-time updates on disease progression which can be beneficial for chronic disease management. As the burden of disease increases, so too does the need for timely drug innovation, sequencing technologies allows for the same. Funding and support for genomic research into chronic disease pathways is being deployed from governments and global health organizations to tackle the burden of chronic disease.
• Collaboration and Strategic Partnerships: Strategic alliances are advancing the use of NGS in drug discovery to a great degree. In early 2023, the CDC and ORISE launched the first genomics and AI-based training program which allows learners from many diverse institutions to standardize sequencing trying experiences and skills. These public health agency collaborations with academic institutions and tech companies are invaluable as they begin to use NGS technologies to produce shared genomic infrastructure. These strategies are valuable and necessary to produce CLIA-compliant datasets and regulatory grade pipelines. They also streamline access to reference databases and accelerate the movement of drugs from lab to clinic. Academic–industry linkages now form the backbone of data-sharing in large trials. Joint initiatives ensure funding, resources, and intellectual collaboration in sequencing-enabled drug development.

Next-Generation Sequencing in Drug Discovery Market Trends

• Cloud-Based NGS Data Analysis: Cloud computing is increasingly used to manage and analyze large genomic datasets due to the scalability and processing power it offers. In 2023, NIH-funded institutions began leveraging hybrid cloud systems for faster genomic interpretation and AI-based analysis. Cloud platforms allow global collaboration and reduce the cost of local infrastructure. In 2024, the CDC added secure cloud access to its NGS Quality Initiative Toolkit, ensuring real-time quality monitoring. Pharmaceutical firms are using cloud-enabled bioinformatics pipelines to reduce development cycles by up to 20%. The shift to cloud systems enhances cross-border data sharing while ensuring regulatory compliance. These tools are crucial for integrating multi-omic datasets into personalized drug development.
• NGS in Companion Diagnostics: Companion diagnostics have quickly solidified their place within ensuring patient access to safe and effective use of targeted therapies. Notably, in 2024, the FDA further expanded their approvals of NGS-based tests to be used in conjunction with immunotherapy treatments for oncology indicating a rapid growth in this area. NGS is also identifying biomarkers that predict the response to a treatment and as a result, helps lower the likelihood of testing failures. Pharmaceutical companies are also now coupling drug candidates with NGS developed diagnostic tests. These diagnostic tests help provide enhanced insights into subsets of patients also leading to potentially more efficient clinical trials. Furthermore, recent CMS reimbursement updates (2023) indicate that the use of NGS diagnostic tests should also commence as best practice in routine care. Further, NGS applied to companion diagnostics eliminate guesswork in administering drug therapy, and thus lessen any potential negative side effects.
• Real-Time Monitoring in Clinical Trials: NGS technologies are being used for real time input on patient response when taking part in clinical trials. This offers an adaptive component to the clinical decision making. For example, in 2025, CDC researchers published results from trials utilizing state-of-the-art circulating tumor DNA sequencing to monitor treatment effectiveness with dynamic capability. These studies concluded that the monitoring approach provided evidence of treatment resistance mutations, several weeks before accompanying symptoms manifested. Essentially, they learned that they could monitor and intervene much faster with NGS. They reported that adaptive trials based on sequencing reduced the total drug development timeline considerably. Further, these approaches reduced development costs by allowing them to remove the ineffective treatment arms earlier.  Overall, pharmaceutical companies are using NGS with candidates within the earlier phases of trials, reducing costs and shortening timelines.

Next-Generation Sequencing in Drug Discovery Market Dynamics

Market Drivers

• Growth and Expansion of Precision Medicine: Precision medicine is completely reliant on genomic data, and NGS is the data that drives personalized medicine. In 2022, NIH announced new genome-guided clinical trials to increase the availability of precision diagnostics to patients who need it. By 2024, more than 50% of all cancer treatments in the U.S. were based on biomarker-based decisions. NGS provides the data that allowed researchers to identify the mutations of actionability that allowed drug developers to develop drugs tailored for specific genomic markers. Policy changes in 2023 by CMS created more encouragement for genomics-based care. All of this highlights NGS is now positioned at the core of personalized medicine, and pharmaceutical pipelines continue to be redesigned from discovery to commercialization based on NGS data.
• Increase of Investment in Biopharmaceutical R&D: There is considerable government and private investment being made into genomics-based therapeutics. In January 2025, NIH awarded $0.014 billion to genomic diversity projects aiming to improve drug responsiveness through ethnic groups diversity. Biopharmaceutical companies are establishing R&D departments focused on scaling to include evidence of real-world genomic evidence. CDC's upgrade of the framework between 2023–2024 also supported genomic trial participants in rare disease research studies and the increase in genomic patents since 2022 indicates innovation and commercial interest. There are several area of unmet medical need in oncology and rare disease, which has created a significant focus on NGS powered discovery and funding is prioritized as a result of that need. Investments also support the development of AI-driven NGS implementations so the NGS method can be streamlined for automation, with the goal of constructing reference databases.
• Academic and Research Institution Collaborations: Academic collaborations are vital to the success of drug discovery projects involving NGS. In August 2023, the CDC and ORISE conducted a virtual program training scientists in AI-driven genomic analysis. Research universities are now playing a key role in generating regulatory-grade genomic datasets. NIH’s Bridge2AI program also supports joint efforts to build AI-ready sequencing workflows. These collaborations enable access to advanced equipment, bioinformatics pipelines, and multidisciplinary expertise. Shared data platforms between universities and pharma firms have reduced redundancy in early-stage development. These partnerships foster a collaborative ecosystem for drug discovery and precision medicine.
• Increasing Role in Rare Disease Research: NGS has revolutionized rare disease diagnosis and therapy development. As of 2024, more than 80% of rare diseases are estimated to have a genetic cause, and NGS is central to identifying these mutations. The NIH’s Undiagnosed Diseases Network expanded in 2023 to include new centers using whole genome sequencing. Early detection of pathogenic variants enables targeted treatment development. The ability to sequence entire families supports inheritance mapping for these rare conditions. Advances in long-read sequencing also help resolve complex structural variants. NGS is thus a key tool for advancing orphan drug pipelines.

Market Restraints

• Problems with interpreting complex data: Interpreting large sets of data generated from NGS is still a major bottleneck to drug discovery. While advancements have been made with AI models for interpretation, clinical-grade interpretation will still rely on some level of human oversight. The U.S National Library of Medicine reported in their June 2023 Deep Data Challenge Final Report, that almost 30% of NGS data produced in clinical trials was not fully utilized and this was due to the lack of effective annotated attention to the data. The inclusion of variants of unknown significance (VUS) only adds to the uncertainty of therapeutic targeting. Additionally, NIH-funded studies published in early 2024 indicated where differences in calling variants were seen between labs data. As it relates to this, a number of tools currently under development exist including standardized ontologies and AI-assisted annotation tools, but none have reached adoption status. Due to this lack of consistency across analysis, reproducibility and timeliness of getting results through regulatory processes will also be diminished.
• Problems with regulatory and ethical mechanisms: As new standards of care integrating NGS are being used for drug development, more ethical and regulatory issues need to be addressed with consent and privacy of patient data. For example, the U.S. Department of Health and Human Services revised its components of the HIPAA protocol related to protecing genomic data in early 2024. Regardless of regulatory process, there are still concerns about the secondary use of patient data, including issues related to data sharing, and consent related to nebulous uses. In addition, as it relates to data processing and analysis, regulators are also worried about examples of machines learning where AI replaces the intelligence of persons, with very little transparency around how testing and validation was performed. With the FDA advance guidance on software-as-a-medical-device (SaMD) standards in 2023, regulators have provided stricter guidelines around review of AI based approaches.
• Limited Access in Low-Resource Settings: Access to NGS remains limited in low-resource settings due to infrastructure, cost, and trained personnel gaps. In 2022, the WHO stated that only 10% of low-income countries had access to real-time genomic surveillance tools. Although mobile sequencing technologies have emerged, implementation is hindered by electricity and internet constraints. In 2023, the CDC and Africa CDC co-launched a training initiative to enhance genomic capacity in sub-Saharan Africa, but results are still developing. The cost of consumables, maintenance, and data storage adds further hurdles. Without inclusive global access, equitable drug discovery using NGS remains unattainable. The digital divide restricts the participation of certain populations in clinical trials.

Market Opportunities

• Expansion in Personalized Oncology: As we contemplate on the recent boom in widely accepted and deployed NGS, it is worth mentioning that the application of NGS in oncology is likely to reach significant expansion in both personalized drug discovery and treatment planning applications. Recently, in 2023, the FDA approved companion diagnostics, based on NGS, for tumor mutation burden and microsatellite instability. The NGS regulations in oncology signal progress in precision oncology. Similarly, the NIH have been deliberating a precision oncology approach for 2024, with 0.025 billion allocated to advance NGS’s utility for cancer subtyping. NGS is ushering in precision oncology, as we now have the ability to create mutation-driven cohorts of cancer subgroups to develop therapies. Pharmaceutical companies have begun to consider employing NGS to improve oncology pipelines, including approaches for responsiveness and resistance. NGS also allows tracking minimal residual disease following treatment and enables more accurate prediction of relapse. The growth and expansion of personalized oncology are unequivocally one of the most commercially viable applications, and likely the area NGS will expand most dramatically into commercialization.
• Microbiome-Driven Drug Discovery: The NGS studies of the human microbiome has paved the way for drug discovery applications we never imagined. As of the end of 2023, the NIH Human Microbiome Project had sequenced thousands of microbial genomes from a combination of health and diseased individuals. Pharmaceutical companies are using NGS actively to study the detail of the interaction of the microbiome with the host for diseases such as IBS, obesity, and mental health. In 2024, the NIH has initiated a grant program worth 0.015 billion, specifically to allow development of therapeutics that modulate microbiomes. NGS makes it easy to identify microbial signatures that predict drug response or conflicted drug toxicity. These studies resulted in the development of new therapeutic categories including probiotics and phage therapy, and potentially the use of microbiota.
• Integration with Digital Health Platforms: NGS data is increasingly being integrated into digital health records and apps, offering novel ways for real-time monitoring and drug responsiveness analysis. In 2024, the U.S. ONC (Office of the National Coordinator for Health IT) published a roadmap to integrate genomic data into EHRs securely. Startups and established firms alike are launching AI-driven digital platforms that connect wearable device data with genomic risk profiles. This integration helps personalize medication plans and alerts providers to pharmacogenetic risks. Pharma firms are using these platforms to collect real-world genomic evidence from diverse populations. The evolution of digital therapeutics now includes predictive genomics, enhancing long-term treatment adherence.

Market Challenges

• Lack of Skilled Bioinformaticians: The growth in sequencing capacity does not circumvent, and instead accentuates, the threat of personnel shortages. The 2022 NIH workforce report indicated that need for genomic data analysts outstrips the workforce by over 35%. Genomic data is complex, and relies on people who have overlapping training and experience in biology, statistics, and software. Universities and programs are beginning to inform their curriculum to reflect current realities in the field, but paralleled innovation in training programs is lagging behind higher demand in the bioinformatics workforce. Companies involved in drug development are packing staff biostatistician, software engineers, and allies to help fill the need, but turnover related to increased retention of trained bioinformaticians. As unfilled demands builds, timelines for projects increasingly elongate, especially in the early phases of drug development. We are witnessing a lack of genomic scientists, immediate job seekers, which will only contribute negatively to future efforts.
• Analysis Pipelines and Standardization: A lack of standardization in sequencing and analysis pipelines continues to be a technical barrier in NGS-driven drug discovery. Each lab uses diverse tools and parameters, often leading to divergent results from the same dataset. In 2023, the FDA initiated audits of sequencing software that is part of its oversight of AI medical tools. The CDC released a harmonization framework for NGS in infectious disease surveillance, yet it has only seen limited uptake. In drug trials, differences in basing calling, variant filtering, and annotating, all limit reproducibility. Effectively, the inability to standardize workflows means that any insights derived from NGS and expressed in regulatory submissions carries a risk. Setting aside the potential uncertainties that arise from an unfiltered, poorly annotated short read ipseq library, reproducible research will require consistent approaches - especially given the likely clinical applications and need for companion diagnostics.

Next-Generation Sequencing in Drug Discovery Market Segmental Analysis

Product Type Analysis

Devices: NGS devices are high-throughput sequencing technology machines that automate all the sequencing of DNA or RNA samples. NGS devices play a key role in implementing sequencing workflows at scale as part of research and drug discovery. In 2023, the U.S. Food and Drug Administration (FDA) rolled out a pilot pre-certification program for next-generation sequencing (NGS)-based oncology devices, specifically for Illumina’s NovaSeq X platforms. Thermo Fisher released new versions of the Ion Torrent devices with increased throughput for rare disease gene panels. The National Institutes of Health's (NIH) All of Us program has announced that it will put $70M towards expanding sequencing infrastructure funding in 2024. Oxford Nanopore launched a vastly smaller sequencer that could be sent to the field for genomic surveillance. All of these developments have improved the overall capture of clinical trial data and the integration of decentralized sequencing.

Consumables: The consumables segment has accounted for highest revenue share in 2024. Consumables consist of reagents, flow cells, and sample prep kits that are needed for sequencing and sample prep processes. Each consumable is single-use with a single run, and it is critical for accuracy of results. In 2024, the Centers for Disease Control and Prevention (CDC) funded a project to help stimulate and localize U.S. manufacturing of next generation sequencing (NGS) consumables due to increased geopolitical threats to the supply chain. The World Health Organization (WHO) also has prequalified rapid DNA extraction kits for infectious disease genomics. Companies like QIAGEN also rolled out additional enzymatic prep kits that are designed and optimized for high-efficient low-input samples. There was also a strong need for sustainable, single-use plastic product options.

NGS in Drug Discovery Market Revenue Share, By Product Type, 2024 (%)

Software & Services: Software and services include bioinformatics tools, cloud-based storage, and analytics software utilized to process, interpret, and store the sequencing data. These services also include sequencing-as-a-service products. The U.S. Office of the National Coordinator for Health IT published genomic interoperability standards in the U.S. in 2023. Cloud-based AI tools began to contribute to clinical trial stratification, notably Google's DeepVariant and NVIDIA’s Clara Parabricks. The FDA updated the guidance for SaMD (Software as a Medical Device) in 2024 to require improved traceability of sequencing algorithms. EPIC and Cerner began implementing sequencing data modules into their EHRs to support oncology clinical workflows. Software is becoming increasingly influential in clinical decision-making and ensuring compliance with regulations.

Technology Analysis

Whole Genome Sequencing (WGS): WGS decodes the entire DNA sequence of an organism’s genome, allowing researchers to uncover structural variations, rare mutations, and genetic disorders. The NIH’s 2023 Genomic Data Commons reported a 20% increase in whole-genome datasets submitted for rare disease studies. Illumina’s NovaSeq X was adopted in major cancer genome projects. In 2024, the UK Biobank released over 500,000 WGS datasets, leading to novel drug target findings. WGS was incorporated in FDA-approved companion diagnostics for several tumor types. Lower per-genome costs due to high-throughput platforms are accelerating its use in mainstream drug discovery.

Whole Exome Sequencing (WES): WES focuses only on sequencing protein-coding regions (exons) of genes, which represent about 1–2% of the genome but contain most disease-related variants. In 2023, a CDC-backed pediatric study using WES identified new neurodevelopmental disorder biomarkers. Academic hospitals began using WES panels in undiagnosed diseases as part of NIH’s Rare Disease Clinical Research Network. Illumina and Thermo Fisher launched updated exome kits with faster hybrid capture. WES is now standard in early-phase oncology trials due to its balance between cost and actionable insights. Bioinformatic pipelines optimized for WES gained regulatory traction for clinical research.

Targeted Sequencing: The targeted sequencing segment has generated highest revenue share in 2024. This technique concentrates on sequencing specific genes or genomic regions of interest which also provides high depth and is less costly and has a faster turnaround time than either WGS or WES. In 2024, Tempus and Foundation Medicine received FDA clearance for new gene panels covering common oncogenic mutations. Targeted sequencing is now widely used in both companion diagnostics and pharmacogenomics panels. CMS also introduced new billing codes associated with reimbursement for specific cancer genomic panel-based diagnostics. COVID-19 surveillance pivoted to targeted amplicon sequencing to evaluate specific spike protein key regions. Researchers are using frequently to either evaluate therapeutic gene targets within rare diseases.

ChIP-Sequencing (ChIP-Seq): ChIP-Seq integrates chromatin immunoprecipitation with sequencing to analyze the association of protein and DNA to study protein-DNA interactions, allowing scientists to gain insights into transcriptional regulation as it relates to mechanisms of drug action. The ENCODE Project at the NIH expanded the funding for ChIP-Seq experiments from 2022 to 2023 to be used as a research tool in studies for at least 150 epigenetic targets. A number of academic drug discovery centers for drug makers employed ChIP-Seq studies to characterize the enhancer domains of immune-oncology genes. A 2024 study from Stanford utilizes ChIP-Seq to validate the regulatory elements for the CAR-T resistance mechanism. Some new antibodies and protocols for ChIP-Seq technologies focused on single-cell studies were developed this year. There are numerous advancements in ChIP-Seq that show this technology is an important tool for validating epigenetic targets.

De Novo Sequencing: De novo sequencing is clearly defined as a sampling approach to reconstruct the genome while not using a reference, and it can be important for studying organisms that have not been sequenced yet, as well as studying divergent genomes. De novo sequencing work was done by the CDC in 2023 to decode new bacterial strains involved in outbreak research of unknown commitment to hospital outbreak investigation. In 2024, the agricultural biotech sector used de novo sequencing to generate information to develop new plant biosynthetic pathways to make drugs and study plant derived drugs. There are very few systems using Nanopore sequencing, but the technology gained momentum with the good home disposition of long-read systems that Nanopore has demonstrated capabilities. The African Pathogen Genomics Initiative is establishing de novo sequencing systems to trace outbreaks in foreign locations. The de novo sequencing approach is also now used in increasing numbers of discoveries of drug targets for the microbiome.

Application Analysis

Drug Target Identification: This involves identifying specific genes or proteins that drugs can interact with to alter disease progression. NGS helps uncover these targets through large-scale gene expression and variant analysis. In 2024, the NIH Accelerating Medicines Partnership (AMP) expanded sequencing-based screening for autoimmune drug targets. Researchers at the Broad Institute used CRISPR-NGS integration to validate oncogene inhibition pathways. The FDA supported NGS-aided target identification under its Emerging Technology Program. Roche applied NGS to profile new targets in its inflammation drug pipeline. Advances in single-cell RNA sequencing have made target identification more precise across heterogeneous tumors.

Pharmacogenomics: Pharmacogenomics uses NGS to understand how genetic variations affect individual drug responses, enabling personalized therapies. It is critical in avoiding adverse drug reactions. In 2023, the U.S. Veterans Affairs program launched a major pharmacogenomic initiative using NGS to guide prescriptions. The expected use of NGS in screening patients in clinical trials. Publications are beginning to accumulate that describe improvements in clinical trial designs using genomics, which approach allowing trials to better determine variable cohort selections by process of elimination, and obtaining "real-world" data that would not have been possible using traditional trial designs. The FDA's Project Optimus will thoughtfully identify the "right" dose range for therapeutic agents, based on trial design approach based on genomic insights, a total departure from traditional trial designs without any genetic analysis.

Toxicogenomics: Toxicogenomics applies NGS to study gene expression changes after chemical exposure, helping identify potential drug toxicities early. In 2023, the Environmental Protection Agency’s ToxCast program was using RNA-Seq as part of its toxicogenomics program to find genomic markers of toxicity from high-throughput drug studies. The predictive toxicology roadmap of the United States Food and Drug Administration (FDA) placed next-generation sequencing (NGS) toxicogenomics in one of its top 5 tools. NGS methods were also employed to validate organoid responses to substances in liver toxicity modeling. The National Institutes of Health (NIH) employed funding derived from the American Rescue Plan Act (ARPA) mandates in 2024 to conduct transcriptome-based toxicological profiling (and screening) of immunotherapeutics. These developments signal the urgency to mitigate late COVID-19 drug studies which caused far too many drug candidate delays and substantial costs to advance drug programs that may have had unforeseen toxic effects.

Clinical Trial Patient Stratification: In clinical trials NGS has been employed for patient stratification and management by identifying actionable genetic biomarkers to predict individual patient treatment responses or disease progression. In 2023, FDA initiated Project Optimus which encouraged the incorporation of genomics for the redesign of trial dose response curves in oncology patients. Genentech began employing NGS-guided patient stratification in several exploratory and phase III clinical trials related to neurodegenerative disease trials. The Centers for Medicare and Medicaid Services (CMS) provided expanded coverage for NGS-based eligibility testing in rare cancer clinical trials for patients. Additionally, even adaptive clinical trials began to operationalize the real-time patient stratification NGS input. Collectively, the participation of NGS for clinical trial stratification and management is increasing both trial efficiency and associated patient response rates, improved regulatory approvals timelines, and overall increased trial approvals.

End-User Analysis

Pharmaceutical & Biotechnology Companies: The pharmaceutical & biotechnology companies segment has recorded highest revenue share in 2024. These companies use NGS for early discovery, target validation, biomarker discovery, and trial optimization. Pfizer, Merck, and Moderna expanded in-house sequencing infrastructure in 2024 to enhance personalized drug pipelines. The FDA fast-tracked NGS-driven biologic submissions under its Real-Time Oncology Review pilot. Amgen used NGS to identify new biosimilar markers in 2023. Biotech startups received NIH SBIR grants for NGS-based drug development tools. These entities are investing heavily in sequencing to shorten time-to-market and improve therapeutic precision.

Academic & Research Institutes: Universities and institutes use NGS to explore basic biology, disease mechanisms, and early-phase therapeutic research. In 2023, Stanford, MIT, and UCSF expanded NGS core labs with NIH funding under the Genome Technology Program. Harvard researchers used single-cell sequencing to identify rare neurodegenerative biomarkers. New York Genome Center launched a consortium in 2024 for pathogen sequencing in drug resistance. Many universities now offer NGS-based drug discovery programs. Their foundational research continues to power innovation across disease areas.

NGS in Drug Discovery Revenue Market Share, By End-User, 2024 (%)

Contract Research Organizations (CROs): CROs conduct sequencing-based drug discovery, preclinical studies, and trial support on behalf of pharmaceutical clients. In 2024, Labcorp and ICON plc integrated long-read NGS in preclinical biomarker screening. CROs in India and Europe scaled up sequencing labs to meet outsourcing demand from U.S. and Japanese pharma. IQVIA expanded its genomics analytics wing in response to NGS demand. CROs increasingly offer full-stack sequencing—from sample prep to regulatory-ready data analysis. Their role is crucial in expanding affordable and rapid sequencing access.

Hospitals & Clinics: These end-users apply NGS to support clinical trials, companion diagnostics, and personalized medicine implementation. Mayo Clinic and Cleveland Clinic incorporated NGS into clinical drug-matching workflows in 2023. The CMS reimbursement for diagnostic NGS panels broadened, encouraging hospital-based pharmacogenomics programs. Children's hospitals began using NGS for stratifying rare disease patients in therapeutic trials. Academic medical centers use NGS data in IRB-approved drug validation trials. Hospitals are becoming key nodes in decentralized, patient-centric drug research networks.

Workflow Analysis

Sample Preparation: This includes DNA/RNA extraction, library prep, and enrichment processes to ready samples for sequencing. The FDA’s 2023 LDT rule impacted clinical labs by tightening oversight of sample prep protocols. QIAGEN and Roche introduced rapid prep kits with automation capabilities that reduce time by 30%. NIH labs began using magnetic bead-based kits in multicenter clinical research networks. Single-cell sample prep tools saw wider adoption for rare cell type analysis. Reliable prep ensures data accuracy, which is critical in regulatory drug discovery pipelines.

Sequencing: The sequencing segment dominates the market. This is the core step where genetic material is read, generating millions of short or long DNA/RNA fragments for analysis. In 2024, nanopore-based sequencing grew in adoption due to real-time analytics and long-read accuracy improvements. Illumina’s NovaSeq X platform achieved new clinical certifications in Europe. Clinical trial sponsors began integrating portable sequencers for decentralized study arms. WGS and WES adoption soared in adaptive trial designs. Sequencing accuracy and speed now directly impact trial endpoints and regulatory filings.

Data Analysis: This involves alignment, variant calling, and interpretation of raw sequencing reads to extract meaningful biological information. AI-powered platforms like NVIDIA’s Clara and DeepVariant gained traction in pharma for real-time variant interpretation. FDA guidance on traceability of genomic pipelines affected software design. The National Cancer Institute funded analytics research to handle terabyte-scale multi-omic integration. Open-source tools like GATK remained standard but now operate in FDA-partnered environments. Scalable, accurate analytics are critical for drug mechanism modeling.

Data Interpretation: This step translates genomic data into actionable insights for drug development, including target validation and biomarker discovery. In 2023, EPIC and Cerner EHR systems added genomic decision support tools to clinical modules. Pharma firms use interpretation software to stratify clinical trial populations more precisely. FDA’s SaMD guidance now requires audit trails for interpretation software. Genomic interpretation teams are now common in R&D units. This final step closes the loop between sequencing and therapeutic application

Next-Generation Sequencing in Drug Discovery Market Regional Analysis

The NGS in drug discovery market is segmented into several key regions: North America, Europe, Asia-Pacific, and LAMEA (Latin America, Middle East, and Africa). Here’s an in-depth look at each region

Why does North America dominate the NGS in drug discovery market?

• The North America NGS in drug discovery market size was valued at USD 0.56 billion in 2024 and is expected to reach around USD 1.65 billion by 2034.

North America, comprising the U.S., Canada, and Mexico, dominates the NGS in drug discovery market due to advanced R&D infrastructure, regulatory clarity, and significant federal investment. The U.S. NIH allocated over $47.6 billion in 2023 toward biomedical research, with NGS playing a central role in target identification and pharmacogenomics. The FDA approved over 100 gene-related therapy INDs in 2024, many based on NGS data. Canada invested $0.2 billion in 2024 for genomics research under its Genomics Action Plan, supporting clinical-grade sequencing for personalized medicine. Mexico’s COFEPRIS approved several NGS platforms in 2023 for early drug toxicity screening. Academic centers in all three countries have integrated sequencing into clinical trial stratification. Government-led initiatives are aligning regional efforts for cross-border genomic data harmonization.

Why is Europe seeing robust growth in NGS in drug discovery market?

• The Europe NGS in drug discovery market size was estimated at USD 0.42 billion in 2024 and is projected to reach around USD 1.23 billion by 2034.

Europe is seeing robust growth in NGS-based drug discovery, led by the UK, Germany, and France, with heavy emphasis on regulatory support and digital health integration. The UK’s Genomics England program launched a drug discovery arm in 2023, sequencing 100,000+ genomes linked to clinical drug response. Germany passed legislation in 2024 to integrate genomic data into national EHR systems, enabling faster biomarker-based drug validation. France expanded its Plan France Médecine Génomique in 2023 with new sequencing centers in Paris and Lyon. European Medicines Agency endorsed a harmonized NGS validation framework in 2024. Public-private partnerships across the EU aim to enhance AI-enabled data analysis in drug trials. These countries are aligning their sequencing regulations under the EU Health Data Space framework. Clinical genomics for rare and cancer-related drug development is gaining traction.

Why is Asia-Pacific hit major growth engine for NGS in drug discovery market?

• The Asia-Pacific NGS in drug discovery market size was accounted for USD 0.34 billion in 2024 and is predicted to surge around USD 0.99 billion by 2034.

Asia-Pacific is emerging as a major growth engine for NGS in drug discovery, supported by favorable regulations and large patient pools. China’s National Health Commission issued guidelines in 2023 promoting NGS adoption in clinical pharmacogenomics and drug resistance profiling. India’s Genome India Project reached its target of sequencing over 10,000 genomes by late 2024, enhancing drug trial design for genetic subgroups. Japan expanded its AMED funding in 2024, with NGS now embedded in government-sponsored oncology drug studies. Australia’s Genomics Health Futures Mission approved $0.08 billion in 2023 for using sequencing in rare disease drug development. South Korea’s MOHW funded national biobank sequencing for precision drug targets in 2024. Regional efforts are increasingly integrating NGS with AI for trial stratification. Cross-border collaborations are underway to standardize protocols across Asia-Pacific nations.

NGS in Drug Discovery Market Revenue Share, By Region, 2024 (%)

What are the trends of LAMEA region in NGS in drug discovery market?

• The LAMEA NGS in drug discovery market size was reached at USD 0.13 billion in 2024 and is anticipated to grow around USD 0.39 billion by 2034.

LAMEA, including Brazil, UAE, Saudi Arabia, and South Africa, is expanding its capabilities in NGS-led drug discovery through national genome projects and international collaboration. Brazil’s Ministry of Health launched a Rare Genomes Project in 2023, aiding new drug target validation using exome sequencing. Saudi Arabia’s Vision 2030 plan included a 2024 directive to use NGS in drug development pipelines for hereditary diseases. The UAE’s National Genome Strategy accelerated in 2024 with a clinical genomics lab for personalized medicine R&D. South Africa’s National Genomics Program integrated sequencing into public hospital cancer registries in 2023. Brazil’s Fiocruz began NGS-based drug screening for infectious diseases in 2024. These countries are working to bridge sequencing gaps through public-private partnerships. Investment in local sequencing infrastructure is increasing to reduce reliance on foreign platforms.

Next-Generation Sequencing in Drug Discovery Market Top Companies

• Illumina, Inc.
• Thermo Fisher Scientific Inc.
• Agilent Technologies, Inc.
• F. Hoffmann-La Roche Ltd. (Roche)
• QIAGEN N.V
• BGI Genomics Co., Ltd.
• Bio-Rad Laboratories, Inc.
• Oxford Nanopore Technologies plc
• Pacific Biosciences of California, Inc. (PacBio)
• PerkinElmer, Inc.
• Genapsys, Inc.
• Eurofins Scientific
• Macrogen, Inc.
• Takara Bio Inc.
• DNAnexus, Inc. 

Recent Developments

Recent partnerships in the NGS in drug discovery industry highlight innovation and collaboration across biotech, pharma, and tech sectors. Illumina has partnered with Janssen and Deerfield to speed up drug target discovery using whole genome data. Thermo Fisher Scientific teamed up with Moderna to support mRNA drug development through high-throughput sequencing. Roche joined forces with PathAI to integrate AI with NGS for more precise cancer drug discovery. QIAGEN and AstraZeneca expanded their collaboration to use NGS in companion diagnostics. These alliances focus on improving accuracy, reducing development time, and personalizing treatments. Together, they are shaping the future of precision medicine through advanced sequencing technologies.

• In March 2025, The Alliance for Genomic Discovery (AGD), led by Illumina and Nashville Biosciences, has sequenced 250,000 whole genomes, forming a vast clinical genomic dataset to accelerate drug discovery. This resource, created from de-identified samples with linked clinical data, is already benefiting eight major biopharma members. The dataset’s diversity enables new insights, especially in autoimmune, liver, and metabolic diseases. AGD plans to add multiomic data like proteomics in the next phase. The project’s rapid progress underscores the value of collaboration and aims to improve diversity in genomic research. Ongoing efforts are set to drive drug development advances for years ahead.
• In July 2024, Thermo Fisher Scientific is supporting the National Cancer Institute’s myeloMATCH precision medicine trial, which aims to improve treatment for myeloid cancers like AML and MDS by rapidly analyzing patient samples for genetic changes. Using next-generation sequencing, patients are matched to targeted clinical trials based on their cancer’s unique genetic profile, allowing for faster, more personalized treatment. The trial includes multiple phases and aims to enroll thousands of patients, testing drug combinations tailored to specific mutations. This approach accelerates the discovery of new therapies and enhances precision oncology options for aggressive blood cancers.
• In April 2024, Bio-Rad Laboratories and Oncocyte Corporation have announced a collaboration to develop and commercialize transplant monitoring products using Bio-Rad’s Droplet Digital PCR (ddPCR) technology. This partnership will leverage Oncocyte’s assay and Bio-Rad’s QX600 ddPCR System to detect donor-derived cell-free DNA (dd-cfDNA), a sensitive biomarker for organ health, through a simple blood test. The approach enables noninvasive monitoring for both recent and older transplants and has shown greater sensitivity than conventional methods, particularly in detecting acute rejection in liver transplant patients. Bio-Rad will participate in a private placement of Oncocyte’s equity and gain exclusive commercial rights in certain markets. The decentralized ddPCR solution offers an alternative to centralized next-generation sequencing tests, aiming to improve transplant care and expand access for laboratories and researchers.

Market Segmentation

By Product Type 

• Instruments
• Consumables
• Software & Services

By Technology

• Whole Genome Sequencing (WGS)
• Whole Exome Sequencing (WES)
• Targeted Sequencing
• Chip-Sequencing (ChIP-Seq)
• De Novo Sequencing

By Application

• Drug Target Identification
• Pharmacogenomics
• Toxicogenomic
• Clinical Trial Stratification

By End-User

• Pharmaceutical & Biotechnology Companies
• Academic & Research Institutes
• Contract Research Organizations (CROs)
• Hospitals & Clinics

By Workflow

• Sample Preparation
• Sequencing
• Data Analysis
• Data Interpretation

By Region

• North America
• APAC
• Europe
• LAMEA