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Solexa Acquisition Could Provide a Boost to Illumina's Plans for the Molecular Dx Market

Illumina is betting that its proposed $600-million acquisition of next-generation sequencing firm Solexa will enhance its opportunities in the fast-growing molecular diagnostics market.
 
Illumina is one of many companies in the molecular biology tools space that is building a diagnostics business off of technologies traditionally used for research purposes. The firm is hoping that Solexa’s platform will uncover SNPs and other biomarkers that could be used in diagnostic panels on the firm’s BeadXpress system, which is expected to launch by the end of this year.
 
The multiplexing capabilities will pit Illumina against several other firms developing multiplex molecular diagnostic assays, as well as almost every other firm in the BCW Index, which are trying to develop molecular diagnostics by employing a variety of techniques that have been traditionally used for research.
 
In addition, it will face competition from other microarray firms including Affymetrix, CombiMatrix, and Nanogen, which have all begun array-based efforts in the molecular diagnostics market.
 
Illumina last week announced that it would acquire Solexa for $600 million in stock. The acquisition, which is expected to close during the first quarter of 2007, would provide Illumina with one of the more advanced platforms in the next-generation sequencing market, the 1G Genome Analyzer. Solexa has so far placed six of the platforms with early-access customers, though it hasn’t generated revenue from them.
 
Illumina President and CEO Jay Flatley said during a conference call last week that Solexa’s technology would greatly enhance Illumina’s ability to grow sales in the $2 billion molecular diagnostics market, which is expected to double by 2010.
 
Molecular Dx Options
 
“One exciting aspect of this merger is the fact that much of the content will wind up in diagnostics,” said Flatley during the conference call. “Ultimately we can deploy marker sets on either platform.”
 
He said Illumina’s BeadXpress platform, which the company acquired with CyVera last year for $17.5 million, “will be optimal for routine testing in low- to mid-multiplex-type applications, where you know what it is you’re looking for and the variations are exactly known,” he said.
 
He is betting that Solexa’s instrument would become a platform of choice for diagnostics when the goal is to test for the presence of mutations in highly variant diseases or to detect low-frequency mutations in cell populations.
 
Another potential application is in early disease detection, “where you’re only looking at perhaps a few cells in a large collection of cells, and you’re looking for mutations in only a small subset,” said Flatley. “Those types of mutations would never be detected using traditional genotyping assays but can be detected using sequencing technology.”
 
Illumina is hoping to roll out its BeadXpress platform by the end of this year, with an ultimate goal of selling tests that run on the system by 2008. During the firm’s second-quarter conference call in July, Flatley said the company’s “intent is to get the factory that produces the system, Illumina East in Connecticut, and the system itself through the regulatory process by the end of the year.”
 
Illumina will then market BeadXpress to CLIA-approved labs and encourage them to build their own tests on the platform. The company also plans to sell BeadXpress instruments to partners that will develop their own content and market the system on their own.
 
According to Flatley, Illumina also hopes to deploy its own content on the platform in 2008, which will be a product of a diagnostic-development deal it struck with DeCode Genetics in May.
 
Illumina will be competing in a multiplex molecular diagnostics market that is quickly becoming crowded. For example, several firms are using Luminex’s xMAP platform to develop their own multiplex assays. Among Luminex’s partners are some of the world’s largest diagnostics firms, such as Abbott Laboratories and Bayer Healthcare, as well as Bio-Rad Laboratories, Tm Bioscience, and Focus Diagnostics, among others.
 
Earlier this month, Qiagen acquired Genaco Biomedical, a developer of PCR-based assays that have been optimized for use on the Luminex system (see BioCommerce Week 11/1/2006). Qiagen also has a partnership with Luminex to develop multiplex products for the research market.
 
PerkinElmer signed a deal with Luminex last January to standardize its multiplex assay development on the xMAP platform. The company will use the technology in biomarker panels for pharmaceutical development and ADME/Tox, and to develop in vitro diagnostics in maternal, neonatal, and prenatal health.
 

“One exciting aspect of this merger is the fact that much of the content will wind up in diagnostics. Ultimately we can deploy marker sets on either platform.”

Earlier this year, Invitrogen, whose BioSource division also is a Luminex partner, licensed its Lux reagent technology to Prodesse, a developer of multiplex PCR-based diagnostic tests that plans to use the reagents to develop assays for its own clinical lab and tests to sell to other labs (see BioCommerce Week 7/26/2006).
 
Beyond Molecular Dx
 
Illumina also hopes Solexa’s technology will enhance its current offerings in the genotyping and gene-expression markets, according to Flatley.
 
“Combined, we believe we’ll be the only company with genome-scale technology for genotyping, gene expression, and sequencing — the three cornerstones of modern genetic analysis,” said Flatley. “We expect that these opportunities represent a combined market today of over $2.25 billion.”
 
Flatley said that he believes Solexa’s technology will help transform the gene-expression market from analog to digitally based science. “This new method of gene expression will allow the emergence of new dimensions in expression,” which could enable scientists to quantitatively measure expression across the entire genome.
 
He said this would “overcome the traditional limitation” of gene-only analysis, the discovery of non-coding RNAs, and the ability of this content to be added to chips, which researchers will be able to use to analyze the expression of non-sequenced organisms, clinical samples, and also to validate data generated from analog arrays.
 
Solexa’s sequencing technology will compete with a variety of new methods developed by other next-generation sequencing start-ups including Curagen’s 454 Life Sciences unit, Applied Biosystems unit Agencourt Personal Genomics, Helicos BioSciences, Pacific Biosciences, Genovoxx, and VisiGen Biotechnologies, among others.
 
Illumina recently reported a 174-percent increase in third-quarter sales to $53.5 million. Flatley attributed the company’s revenue growth to “strong interest in genotyping” products.
 
Illumina will be added to the BCW Index at the beginning of 2007.

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