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Illumina CEO Says Whole-Transcriptome DGE Will Eventually Displace Expression Arrays

Illumina is developing an application on its Genome Analyzer DNA sequencer called whole-transcriptome DGE that it believes will replace traditional microarray-based gene expression tools as pricing for the application drops, CEO Jay Flatley said last week.
Speaking at Merrill Lynch’s Global Pharmaceutical, Biotechnology and Medical Device Conference in New York last week, Flatley also stressed that traditional arrays will continue to be the platform of choice for genotyping, and addressed several capital-improvement projects worth around $40 million that Illumina plans for 2008.
Since it launched two digital gene-expression applications on the Genome Analyzer last July, Illumina has been touting the instrument as a replacement for whole-genome expression arrays (see BAN 7/24/2007).
Specifically, Illumina launched Digital Gene Expression for Tag Profiling, an application that can generate profiles for any transcript from any gene in any organism, and Digital Gene Expression for Small RNA Analysis, an application that can be used to discover all forms of small non-coding RNA from any organism.
Now the firm plans to launch a whole-transcriptome digital gene-expression application that Flatley believes will enable Illumina to capture a larger share of the expression market. He said that the firm’s current products enable tag-based gene expression, which allows users to look at particular sections of the genome. Whole-transcriptome expression, on the other hand, allows users to look at the entire genome at once.
According to Flatley, while tag-based DGE is cost competitive with array-based gene expression, whole-transriptome DGE will be “several times” more expensive than arrays, but the price of doing the application will “drop substantially” in the next year or so.
An Illumina spokesperson this week declined to comment on when the application could be launched, or how much it might cost.
But at the conference, Flatley said that “when it does become available, you will see significant displacement of whole-genome expression arrays and, in particular, because you get so much more information, people will be willing to pay more for these.” He pointed out that users will be able to use whole-transcriptome DGE to study any organism because it will not be necessary to know the sequence of the organism.

“We see a long life for digital array applications like genotyping, but less so for the analog applications like expression.”

Moreover, DGE will make up for several shortcomings that Flatley said are inherent in expression array technology. “In array formats you are really measuring an analog signal, and you are measuring the degree of fluorescence; and it is very challenging to distinguish between whether you have 500 counts of fluorescence [or] 550 counts of fluorescence,” he said. “That distinction is not really statistically significant.”
He also said that data from analog expression arrays “depends on what probes the company decided to put on the array for you to detect a particular sequence in the genome. Therefore there are always questions about comparability across platforms, and you have to know the genome in advance.”
Some array vendors that sell analog chips do not feel that digital gene expression threatens their market share.Two weeks ago Affymetrix CEO Stephen Fodor told investors during the firm’s fourth-quarter earnings call that ”people will do digital gene-expression experiments, but I don’t think the volumes will be anywhere near what they’ll be for microarray technology. 
“I think there will always be these discovery techniques and people in science will use them, but long term I think the high volumes need to come from things like microarray technology,” he added (see BAN 2/5/2008).
Also, a recent survey by the Association for Biomolecular Research Facilities’ Microarray Research Group found that only around 9 percent of responding array users believe that next-generation sequencers will replace gene expression arrays in the next five years (see related story, this issue).
No ‘Cannibalization’ Yet
Though Flatley said that DGE is technically superior to existing array technologies, he said that Illumina’s line of gene expression BeadChips performed well over the past year, and that DGE does not currently threaten to “cannibalize” the company’s expression chips.
He also pointed out that while DGE may eventually displace arrays in the expression market, Illumina does not see the same thing occurring in the genotyping market, where the company is one of the principal providers of chips for whole-genome association studies.
“Genotyping is also a digital application on arrays because what you are measuring is not ‘what is the amount of something,’ [but rather] ‘what is the base at a particular location?’” he said. “Arrays are perfect at doing genotyping and so we can do it at large scale and low cost. Our view is that it is going to be a long time before sequencing replaces genotyping in a large way because as the price of sequencing drops, the price of genotyping will drop correspondingly,” said Flatley.
According to Flatley, arrays are also well suited to genotyping because customers using arrays for whole-genome association studies typically don’t need to know all the sequences between genomic variants; they just need to know the location of the variants.
“It is when you need to discover rare variations that you need the sequencing technology,” Flatley said. “So we see a long life for digital array applications like genotyping, but less so for the analog applications like expression.”
Capital Expenses
During his presentation, Flatley also said that Illumina will spend $40 million on capital expenditures this year, roughly double of what it spent in 2007.
According to Flatley, the company will use part of that amount to add another building to its headquarters in San Diego, and consolide into one facility its commercial offices in Cambridge, UK.
Flatley also said the company expects to add about 500 employees during the year. The company currently employs around 1,000 he said. Last week, Flatley told investors that the company is “aggressively” hiring, especially in sales and marketing in the European and Asian markets (see BAN 2/5/2008).
Illumina is also setting up an internal resource called Illumina University to train new hires. According to an Illumina spokesperson, the resource is expected to be functional by midyear.