In 2011, sequencing was once again the big story in diagnostics. But unlike 2010 when the big news was the successful IPOs of next-generation sequencing companies Pacific Biosciences and Complete Genomics, the tone in 2011 was more nuanced.

Key trends include gene sequencing and approval in tandem of drugs and diagnostics.

Pharma is keenly interested in new cancer diagnostics tools, which in many cases are aimed at selecting the best therapy for a specific patient, measuring response to therapy and predicting or more sensitively measuring relapse. These technologies are often the same as those used in pharma's drug development efforts. But deciding with whom and how to ally for the development and distribution of tests is difficult, showing just how uncharted, and bumpy, is the current diagnostics terrain.