In addition to surpassing its internal estimates for first quarter 2006 revenues, Illumina last week announced the forthcoming availability of its HumanHap 500 BeadChip for genotyping studies, pledged to double current manufacturing levels, and said it would launch its CyVera platform by the end of this year.
llumina last week said total receipts for the three months ended April 2 increased 93 percent to $29.1 million from $15.1 million year over year, surpassing its January guidance of $22 million to $24 million (see BAN 2/7/2005).
Receipts from its three sources of revenue increased across the board year over year, with product revenue increasing 91 percent to $23.3 million; service and "other" receipts increasing 96 percent to $5.3 million; and research revenue increasing 97 percent to $574,000 (see Sidebar for total Q1 results).
According to Christian Henry, Illumina's chief financial officer, the company attributed the results to strong demand for its two core technologies, gene expression and SNP genotyping.
"On a year-over-year basis, [revenue] growth was driven primarily by triple-digit increases in both genotyping and gene-expression consumables," Henry said during a conference call last week.
"The pharma and biotech industries are just beginning to adopt whole-genome genotyping. We believe that the clinical trial, pharmacogenomics, and post-market surveillance opportunities [for genotyping] will be much larger than the research opportunities."
Revenue from gene expression grew 400 percent year over year and 100 percent sequentially over the fourth quarter of 2005, he said, and added that Illumina sees "particularly robust growth in the whole-genome genotyping market."
According to Illumina CEO Jay Flatley, the firm is days away from launching its HumanHap550 BeadChip for genotyping studies, an array that expands the genomic coverage contained on the HumanHap300 BeadChip that the company launched in January (see BAN 1/7/2006).
Flatley said during last week's call that the company's strong revenues came from lucrative research projects that use BeadChips for whole-genome genotyping — for example, a partnership with Cancer Resaerch UK that netted the firm $14 million to date.
But Flatley stressed that the genotyping market is still nascent, and that Illumina expects pharmaceutical and biotech companies to increase their adoption of the technology over the next two years.
"The pharma and biotech industries are just beginning to adopt whole-genome genotyping," Flatley said. "We believe that the clinical trial, pharmacogenomics, and post-market surveillance opportunities [for genotyping] will be much larger than the research opportunities."
Flatley also said that pharma, in particular, has passed a critical stage in its attitude towards genotyping. "As a group they've moved from the consideration of whether to do whole-genome genotyping to how to do whole-genome genotyping," Flatley said. "There [now] are increased considerations over which clinical trials to use it in and whether to outsource it or to bring it in house."
In order to meet the demand llumina sees on the horizon — and to dodge the kinds of mistakes rival Affymetrix has made in the past — the company plans to further expand its manufacturing capacity, the second such expansion Illumina has undertaken since the spring of 2005.
Flatley said that it has completed its plan to bring to 33 the number of decoding imaging systems it uses to produce its chips, and that the firm now plans to double its current capacity by the third quarter. The company previously said it would expand capacity "if necessary" (see BAN 2/7/2006).
Illumina declined to provide an estimate of what its manufacturing capabilitites will look like by then, but a company spokesman told BioArray News this week in an e-mail that it is "implementing process improvements that will enable [Illumina] to achieve up to a 25 percent throughput increase without adding any new decode capacity."
Flatley said that the expansion will be implemented in Illumina's San Diego facility.
CyVera Rechristened 'BeadExpress'
Illumina is also making headway in developing its CyVera platform, which uses the glass particle microbead technology it obtained when it acquired the company with the same name last year.
Flatley said that the company plans to launch the CyVera platform, which Illumina has renamed the BeadExpress System, by the end of this year.
"We plan on launching the BeadExpress reader as well as several core assays before year end," Flatley said. "The same assays that run on the BeadStation are being developed for the BeadExpress station."
At a minimum, Illumina's spokesman said this week in an e-mail, the firm's GoldenGate assay will be optimized to run on the BeadExpress platform.
Last week Flatley said that, at first, BeadExpress will launch directly into the research market. However, in the long term, the company has expressed some interest in taking an assay paired with the BeadExpress system through the US Food and Drug Administration clearance process.
— Justin Petrone ([email protected])
Illumina Posts 93-Percent Jump in Q1 Revenue
Illumina last week reported a 93-percent increase in first-quarter revenues atop greater R&D spending and a narrowed net loss.
Total receipts for the three months ended April 2 increased to $29.1 million from $15.1 million year over year, Illumina said. Receipts from its three sources of revenue increased across the board year over year, with product revenue increasing 91 percent to 23.3 million, service and "other" receipts increasing 96 percent to $5.3 million, and research revenue increasing 97 percent to $574,000.
Illumina said R&D spending increased 39 percent in the first quarter to $8.2 million from $5.9 million.
Net loss in the period declined to $104,000, or $.00 per share, from $1.2 million, or $.03 per share.
Illumina said it had around $49 million in cash and investments as of April 2.
The company also updated its guidance for the second quarter and the remainder of the year. For the second quarter, the company now expects total revenue to be between $31 million and $33 million, an increase of between 96 percent and 108 percent, year over year.
For the full year, Illumina now said it believes total revenue for 2006 will be between $130 million and $140 million, an increase of between 77 percent and 90 percent year over year.
The company also said that excluding the effect of non-cash stock compensation expense, R&D spending in 2006 as a percentage of total revenue is expected to decline, but will increase in whole terms to between $30 million and $35 million from $27.7 million in 2005.
Illumina also said it expects to be "at least" cash flow breakeven this year. "Working capital requirements and spending on capacity expansion will be the key drivers of cash flow in 2006," the company said in a statement.