For the first time ever, an XPRIZE has been cancelled. The reason — unexpected innovation in next generation sequencing. The Archon Genomics XPRIZE announced in 2006, had promised to award $10 mil to the first team that was able to accurately sequence 100 whole human genomes at a cost of $10,000 or less per genome in a short period of time. The competition was cancelled as XPRIZE CEO Peter Diamandis and team felt it was not serving its intended purpose to incentivize technological innovation in gene sequencing.

As stated by Peter Diamandis, “Every XPRIZE is carefully designed to address a market failure and hopefully create a new industry to achieve breakthroughs and solutions once thought to be impossible.” Although the Archon Genomics XPRIZE was conceived according to this criteria, the XPRIZE team felt that innovation in gene sequencing has been progressing independently of the XPRIZE incentive, therefore voiding the need for the competition.

The rapid innovation in next generation sequencing has caused sequencing times to decrease and prices to plummet to around $5,000 per genome. The XPRIZE team feels as if the targets laid out by the competition will be met in the very near future with or without their incentive, and have opted to cancel the XPRIZE and return the money to sponsors. The announcement by Peter Diamandis can be read in its entirety on the Huffington Post.

The logic behind the XPRIZE cancellation seems clear, however it remains to be seen what backlash, if any, arises from scientists who may have spent considerable time and effort devoted to meeting this challenge. Although next gen sequencing instruments are developed by large companies such as Illumina ($1.15B revenue), which may not be driven by a competition like the XPRIZE, innovation in this field must also be attributed to the wider research community, of which a team may have conceivably won the competition independent of any large commercial enterprise. In fact, in his cancellation announcement, Peter Diamandis thanks George Church and the Wyss Institute at Harvard for registering for the competition. Does the XPRIZE lose some of its ability to incentivize future competitions because of this cancellation? We welcome your comments on the matter.