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Despite Interest in Sequencing, Illumina's BeadXpress System Selling Well, Says CFO

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Interest in second-generation sequencing may have "stolen its thunder," but orders for Illumina's digital microbead-based BeadXpress platform have increased in recent quarters, largely on the backs of agricultural biotechnology customers, according to a company official.

Chief Financial Officer Christian Henry said that adoption of the BeadXpress, which launched in 2007, was initially slowed by manufacturing constraints and a inadequate sales and marketing approach, though the firm has "ironed out" all challenges associated with selling the system (see BAN 3/27/2007).

"Over the last few quarters we have seen increases in placement rates of instrumentation," Henry said during the Goldman Sachs Healthcare Conference in New York last week. "We see consumable input at roughly $100,000 a year per system now, while originally we thought there would be half of that."

According to Henry, interest in the BeadXpress, which enables users to genotype from one to thousands of biomarkers, partially constrained its growth. The company was pressed to manufacture instrumentation and reagents at rates that were difficult to meet.

"We had a lot of challenges in the early days of the launch, not only of manufacturing the instrumentation, but also the reagents and the beads," Henry said. "It's actually a very complicated system, but we have ironed all of those issues out and that has been completed." There were occasions when these manufacturing constraints impacted the company's ability to deliver the system to users — a factor that "was impacting order decisions," he said.

Henry said that Illumina also faced sales challenges related to BeadXpress, mostly because "next-generation sequencing had stolen its thunder." Illumina's sales force is "organized to sell all the products Illumina has at its disposal," Henry said. Because there was "so much excitement" generated by the firm's Genome Analyzer platform, its sales force "disproportionately" focused on selling that. In response to this issue, Illumina has created a team of BeadXpress specialists to sell the system, a decision that Henry said has positively impacted its sales.

In particular, it's been European agbio customers that have driven sales of the BeadXpress. Henry said that Illumina is "still trying to figure out" why Europe has performed better than North America or Asia in BeadXpress adoption, but has decided that "at some level, it is due to the sales and marketing effort."

Then there are BeadXpress competitors. While Affymetrix, Illumina's main genotyping competitor, bought both Panomics and True Materials last year to compete in the lower-multiplex genetic-analysis market, Henry acknowledged that Illumina is fighting for market share with other companies, such as Luminex. Some Panomics assays, though, also run on Luminex's instrumentation.

Henry said that Luminex's xMap bead-based system has a "much larger install base" than BeadXpress, but argued that "every quarter" Illumina is "penetrating that installed base and generating demand."

"The system is very flexible and very competitive against the xMap and other technologies," Henry said. "We have solved our execution challenges, and we have worked hard on our sales capabilities and so we see a lot of upward potential for that product line."

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