Illumina’s dominance in the DNA sequencing market
The future of personalized medicine depends upon the ability to quickly and cheaply sequence a patient’s genome, which is all of the DNA that “codes” for an individual organism—including all those disease-causing mutations. Illumina (NASDQ: ILMN) is a key player in the field of DNA sequencing. It aims to “improve human health by unlocking the power of the genome,” and over the past two decades, it has primarily focused on developing DNA sequencing machines, which are used by research labs and hospitals worldwide.
Illumina was one of the first entrants into the DNA sequencing market in 1998 and it has dominated the market ever since. Its “first-mover advantage” has contributed to its current control of around 90% of the market share for Next-gen DNA sequencing machines, which are supplemented by sales of various types of “à la carte” kits and requisite consumables.
Illumina expands into the personalized genomics market
In recent years, Illumina has become something of a “victim” of its own success. Illumina’s sequencers have saturated the market after many research labs and hospitals have purchased them. Next-gen sequencing has become quite inexpensive and efficient, and many of Illumina’s customers are viewing this equipment as a relatively long-term asset (5+ years). As a result, the overall sales for Illumina’s sequencers have begun to diminish.
As part of its growth strategy, Illumina has made substantial investments in R&D, aiming to develop new and improved sequencing technologies. However, as a means of diversification, Illumina has also been expanding into the lucrative field of personalized genomics. For example, Illumina spun off a new company called Helix, which performs genetic analyses for customers who submit their DNA for sequencing, similar to 23andMe DNA Ancestry Testing. Illumina spun off GRAIL, which is developing diagnostic blood tests for cancer, also known as “liquid biopsies.” Interestingly, Helix and GRAIL are working on an “App store”-like product model that will allow customers to “hold” their sequenced DNA and submit it online for other types of analyses developed by third parties. In addition to spinning off moonshot ventures, Illumina is also acquiring attractive personalized genomics companies. For example, it recently acquired Verinata Health, which produces a prenatal diagnostic blood test.
Illumina spins off Verogen, a forensic genomics company
On August 24th, Illumina and Telegraph Hill Partners (a bioscience venture capital
and equity firm based in San Francisco) announced the spin-off of its latest company: Verogen, Inc. Based in San Diego, Verogen will now have exclusive rights to sell Illumina’s MiSeq FGx Forensic Genomics System, which is already being “deployed in operational crime laboratories, private service labs, and forensic research institutes worldwide.”6 This is just the latest step that Illumina has taken towards becoming a formidable leader in the personalized genomics market.
Author: Sarah A. Elliott, Ph.D.