Skip to main content
Premium Trial:

Request an Annual Quote

Illumina's Q4 Array Revenues Climb 4 Percent on BlueGnome Addition, HumanCore Demand

Premium

Illumina's acquisition of BlueGnome has provided a boost for its array business. Company executives said in an earnings call this week that total microarray revenues for the fourth quarter of 2012 were up 4 percent year over year, mainly due to the inclusion of the Cambridge, UK-based firm, which Illumina bought last September.

And while Illumina's organic array revenue — consisting mainly of its BeadArray and VeraCode products — declined slightly in the quarter, it saw order volume grow sequentially as a result of demand for its Omni family of Infinium genotyping arrays, and also saw "significant interest" in its recently launched Infinium HumanCore BeadChips, according to CEO Jay Flatley.

Flatley told investors during the call that since it launched the product, Illumina has received orders for enough HumanCore BeadChips to process 325,000 samples, and that the company expects to begin shipping the new chips this quarter. Illumina introduced the new genotyping arrays, which are geared toward biobanks, genome centers, and core labs, last fall (BAN 10/16/2012)

Illumina's 4 percent uptick in its array business was overshadowed by demand for its various sequencing-based products, which drove a 24 percent increase in overall revenues to $309 million in Q4 from $250 million in the fourth quarter of 2011. At the same time, Flatley noted in the call that the array market continues to be dynamic.

As an "illustration of the high activity level that remains in the array market," Flatley noted that the firm shipped enough chips to process more than a million samples across all of Illumina's array-based product lines, including its BeadArray-based Infinium and GoldenGate arrays, and its digital microbead-based VeraCode assays, which are run on its BeadXpress system.

BlueGnome and Verinata

Illumina paid $88 million in September to acquire BlueGnome as part of an effort to strengthen its play in the reproductive health market (BAN 9/25/2012).

Another building block in Illumina's strategy is Verinata Health, a provider of next-generation-sequencing-based noninvasive tests for prenatal identification of fetal chromosomal abnormalities. Illumina signed an agreement to acquire Verinata for up to $450 million earlier this month. "These acquisitions [of BlueGnome and Verinata], combined with our internal carrier screening and cytogenetics programs, provide us with a solid foundation" to compete in reproductive health, Flatley said.

BlueGnome offers a menu of CytoChips for both constitutional and cancer cytogenetic research as well as its internally produced 24sure bacterial artificial chromosome arrays used in preimplantation genetic diagnostics, or PGD.

BlueGnome also offers software called BlueFuse that automates microarray processing and enables laboratories to process large numbers of samples while storing all cases in a centralized database, so that users can rely on the results from these historical cases when interpreting new ones. Illumina has said that it plans to make its existing cytogenetics-focused products compatible with BlueGnome's software and that the software will be part of a package for postnatal clinical cytogenetics that it intends to submit to the US Food and Drug Administration later this quarter (BAN 12/4/2012).

According to Marc Stapley, Illumina's chief financial officer, BlueGnome generated $7 million in revenues for the company in Q4, higher than an original estimate of $5 million for the quarter (BAN 10/30/2012).

Stapley attributed the better-than-anticipated performance to the "early success" of the "ongoing integration" of the firm. Noting the contribution from BlueGnome, investment firm William Blair this week revised its outlook for Illumina's array business. Analyst Amanda Murphy wrote in a research note that William Blair now expects the company's array revenue to be "roughly flat" with 2012. It previously had estimated that array revenues would decline by 3 percent in 2013.

Flatley commented that Illumina intends to add 50 sales and marketing personnel this year as it intensifies its expansion into the clinical market. Though he did not say how many staffers would be added to sell array-based products, he did say there would be "some investments" in BlueGnome's sales force.

Looking forward, Flatley hinted at future integration opportunities for its BlueGnome and Verinata businesses.

"Particularly, as we get into subchromosomal analysis, there's a very clear intersection with what we're doing with PGD and with cytogenetics," Flatley said. "So those programs will become more integrated as we move forward," he said. He did not elaborate.

'Stable Behavior'

Continued concerns about a potential 8 percent across-the-board reduction in the US federal budget, known as sequestration, that could impact government science funding, did not affect Illumina's customers' behavior in the fourth quarter, according to Flatley.

"Our customers had very stable behavior, very stable ordering rates," Flatley said, adding that the company has been "surprised" by how "unaffected they seem to be by any of the macro conditions or the sequestration risk that still hangs out there."

That stability contributed to the firm's Q4 performance. Illumina reported total revenues of $309.3 million for the three months ended Dec. 30, 2012, a 24 percent increase over $250.1 million in the fourth quarter of 2011. The company also reported product revenues of $278.9 million, up from $230.4 million year over year, and service and other revenue of $30.3 million versus $19.7 million for Q4 2011.

Sequencing revenues in the quarter grew 35 percent year over year, driven by demand for consumables and growth in the firm's HiSeq and MiSeq instrument base. Sequencing instrument revenue grew 6 percent compared to the fourth quarter of 2011. Stapley said that revenues from array instrument placements were slightly down but did not elaborate.

Illumina posted a net income for the quarter of $71.9 million, compared to $11.7 million for the fourth quarter of 2011. The quarter included a $48.6 million pre-tax gain from the sale of the firm's minority interest ownership in Decode Genetics, which was acquired by Amgen last month for $415 million.

Its R&D spending for the quarter was $56.9 million, up 25 percent from $45.5 million in the year-ago petiod, while its SG&A expenses grew 31 percent to $79.7 million from $60.9 million.

For full-year 2012, Illumina reported total revenues of $1.15 billion, up around 8 percent from $1.06 billion in 2011. Its product revenue rose to $1.06 billion from $987.3 million, and its service and other revenue increased to $92.7 million from $68.3 million.

Illumina posted a profit for the year of $151.3 million compared to $86.6 million for FY 2011.

The firm's R&D spending for the year was $231 million, up 17 percent from $196.9 million in 2011, and its SG&A expenses increased 9 percent to $286 million from $261.8 million.

Illumina finished the year with $434 million in cash and cash equivalents and $916.2 million in short-term investments. For 2013 Illumina expects to report revenue growth of 15 percent.

The Scan

Another Resignation

According to the Wall Street Journal, a third advisory panel member has resigned following the US Food and Drug Administration's approval of an Alzheimer's disease drug.

Novavax Finds Its Vaccine Effective

Reuters reports Novavax's SARS-CoV-2 vaccine is more than 90 percent effective in preventing COVID-19.

Can't Be Used

The US Food and Drug Administration says millions of vaccine doses made at an embattled manufacturing facility cannot be used, the New York Times reports.

PLOS Papers on Frozen Shoulder GWAS, Epstein-Barr Effects on Immune Cell Epigenetics, More

In PLOS this week: genome-wide association study of frozen shoulder, epigenetic patterns of Epstein-Barr-infected B lymphocyte cells, and more.