Skip to main content
Premium Trial:

Request an Annual Quote

Illumina Forecasts ‘Bright’ Future for Its Genotyping, Expression Product Lines

Illumina expects strong sales of its genotyping and gene-expression arrays to continue for at least the next five years, buoyed by higher-density chips, lower cost, and the continuing appeal of whole-genome genotyping studies, according to CEO Jay Flatley.
Flatley told investors during the firm’s first-quarter earnings call last week that Illumina “definitely expects whole-genome association studies to continue for at least 2-4 years very robustly,” and that the company will see follow-on studies continue, as well as the conversion of those discoveries into diagnostic products.
Additionally, Flatley said that the decreasing cost for Illumina’s array products has made the firm’s technology accessible to new markets, such as agricultural biotechnology as well as the emerging consumer genetics market.
Illumina, for example, provides the technology platform for 23andMe’s Personal Genome Service. “All in all, I think it’s a pretty bright opportunity in terms of the technology and the marketplace,” Flatley said of the firm’s array business.
For the three months ended March 31, Illumina reported revenues of $121.9 million compared with $72.2 million in the first quarter of 2007. The company brought in consumables revenue of $63.2 million during the first quarter compared to $38.8 million in the first quarter of 2007. During the call, Chief Financial Officer Christian Henry said that “sequencing instrumentation and genotyping consumables contributed about equally to both year-over-year and sequential product revenue growth.”
While Illumina launched several new products during Q1, including its HD Human610-Quad Beadchip, the first of the new high-density product family, Flatley said that products introduced last year were responsible for most of the firm’s growth during the quarter. The company’s Human1M Beadchip represented the largest contribution to Beadchip revenue, while its CNV 375-duo, the HumanHap550-duo, and its custom iSelect format chips were the next leading products in Illumina’s portfolio for the quarter.
At the same time, Flatley said that he expects to see more customers migrating from the firm’s array platform to its next-generation sequencing platform, the Genome Analyzer.

“We definitely expect whole genome association studies to continue for at least 2-4 years very robustly.”

“In the array business I expect over the next 2-5 years you will begin to see some transitions there,” he said. Flatley also argued that it would be a “timely revenue opportunity” for personal genetics companies like 23andMe and Navigenics, which currently uses Affymetrix arrays, to begin thinking about adopting the analyzer as cost per sequencing run drops.
Navigenics CEO Mari Baker told BioArray News last week that the firm is pleased with Affy’s whole-genome genotyping array, but that it expects to eventually adopt next-generation sequencing [see related story, this issue].
“It is clear that as additional studies come down the line and are approved by our scientific curators that there will be SNPs that aren’t covered by the array and we will have to get additional genotyping done to provide customers with the most accurate data as possible,” she said.
“We would certainly move to sequencing,” Baker added. “Maybe it will take eight years to get to a point where sequencing is applicable, but in the meantime we will use whatever technology we need to use to make sure we have most accurate results for users.”
While Illumina continues to urge array users to shift to its next-generation sequencing, the company is also looking to transition those customers, or at least augment their studies, to use the digital microbead-based BeadXpress system.
Illumina began shipping the BeadXpress in March 2007, and initially positioned the platform as a gateway to developing clinical assays. Indeed, Flatley referred to BeadXpress at the time as “an integral part of our broader vision for the deployment of genomics in medicine."
Recently, however, Illumina has begun transferring assays developed to run on its arrays over to BeadXpress. Specifically, the company’s DASL expression assay, which was designed to profile expression in degraded RNA, and its GoldenGate assay for epigenetic profiling, were both configured to run on BeadXpress.
“The positioning of this product is that it has a very wide range of capabilities all the way from one or a couple of markers up to 384, and it can run a whole number of applications,” Flatley said. “We have now started moving many of our array applications over and so it’s now a platform that you can use to do many different things as well as develop your own applications.”
Q1 in Full
For the quarter, Ilumina reported a 69-percent increase in first-quarter revenues year over year while swinging back to a profit compared to a loss in last year’s Q1.
The San Diego-based firm reported revenues of $121.9 million compared with $72.2 million in the first quarter of 2007.
Consumables revenue swelled to $63.2 million from $38.8 million in the first quarter of 2007, and instrument revenue for the quarter rose to $44.5 million from $19.6 million year over year, driven partially by the introduction in February of its Genome Analyzer II.

Service and “other” revenue increased to $11.2 million from $10.9 million year over year.

Illumina posted net income of $13.4 million, or $.21 per share, compared with a net loss of $298.1 million, or $5.58 per share, for the first quarter of 2007. Last year’s results included a non-cash charge related to its $600 million acquisition of Solexa.
The firm’s R&D expenses climbed 28.8 percent to $20.6 million from $16 million, while its SG&A costs rose 43.2 percent to $33.8 million from $23.6 million.
Illumina finished the quarter with $118.6 million in cash and cash equivalents.
The company expects to report fiscal 2008 revenue of between $515 million and $535 million. For the second quarter, it forecast revenues of $127 million to $132 million with earnings per share of $.37 to $.40.

The Scan

Germline-Targeting HIV Vaccine Shows Promise in Phase I Trial

A National Institutes of Health-led team reports in Science that a broadly neutralizing antibody HIV vaccine induced bnAb precursors in 97 percent of those given the vaccine.

Study Uncovers Genetic Mutation in Childhood Glaucoma

A study in the Journal of Clinical Investigation ties a heterozygous missense variant in thrombospondin 1 to childhood glaucoma.

Gene Co-Expression Database for Humans, Model Organisms Gets Update

GeneFriends has been updated to include gene and transcript co-expression networks based on RNA-seq data from 46,475 human and 34,322 mouse samples, a new paper in Nucleic Acids Research says.

New Study Investigates Genomics of Fanconi Anemia Repair Pathway in Cancer

A Rockefeller University team reports in Nature that FA repair deficiency leads to structural variants that can contribute to genomic instability.