Introduction: There is an immediate need for functional and molecular studies to decipher differences between disease and 'normal' settings to identify large quantities of validated targets with the highest therapeutic utilities. Furthermore, drug mechanism of action and biomarkers to predict drug efficacy and safety need to be identified for effective design of clinical trials, decreasing attrition rates, regulatory agency approval process and drug repositioning. By expanding the power of genetics and pharmacogenetics studies, next-generation nucleic acid sequencing technologies have started to play an important role in all stages of drug discovery. Areas covered: This article reviews the first-and second-generation sequencing technologies (SGSTs) and challenges they pose to biomedicine. The article then focuses on the emerging third-generation sequencing technologies (TGSTs), their technological foundations and potential contributions to drug discovery. Expert opinion: Despite the scientific and commercial success of SGSTs, the goal of rapid, comprehensive and unbiased sequencing of nucleic acids has not been achieved. TGSTs promise to increase sequencing throughput and read lengths, decrease costs, run times and error rates, eliminate biases inherent in SGSTs and offer capabilities beyond nucleic acid sequencing. Such changes will have positive impact on all sequencing applications to drug discovery.