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Oppenheimer Bullish on Life Tech's Ion Proton Instrument as Anticipated Launch Nears

NEW YORK (GenomeWeb News) – Anticipating the expected launch of the Life Technologies' Ion Proton benchtop sequencer, Oppenheimer analyst David Ferreiro today estimated 140 placements of the system in 2012 translating to $35.3 million in revenues.

He added that he estimates 200 placements of Ion Proton in 2013 and 300 placements in 2014, which would result in revenues of $75 million and $150.7 million, respectively.

Given the list price for the system ($250,000 for the platform, software, and sample preparation kit) and its disruptive potential, Ferreiro also called his estimates "conservative."

The Ion Proton is expected to launch this month, first with the Ion Proton I chip for exome sequencing, as early as next week when Life Tech holds its Ion World 2012 meeting in San Francisco. Later in the year or early in 2013, Life Tech is anticipated to follow with the introduction of the Ion Proton II chip designed for whole-genome sequencing.

As GenomeWeb Daily News' sister publication Clinical Sequencing News previously reported, Life Tech has already received orders for more than 100 systems, according to company officials, and some clinical centers including Boston's Children's Hospital and the Hospital for Sick Children said they plan to use the system for clinical applications.

With interest in the instrument already running high and the "wildly successful launch of the Ion Torrent," Ferreiro said in a research note, "we believe the Proton has the potential to vastly exceed our expectations."

As examples of the potential for the Ion Proton, he pointed to the launches of Illumina's HiSeq 2000 and the Ion Torrent Personal Genome Machine.

Since its introduction in January 2010, more than 1,000 HiSeq 2000's have been placed, Ferreiro said, and if the Ion Proton were to see the same level of success, about 550 instruments would be placed in 2013, and 450 instruments would be installed in 2014. Under such a scenario, total Ion Proton revenues would reach $169.5 million in 2013 and $262.0 million in 2014.

The 2013 figure estimate is based on a total of 690 instrument placements between 2012 and 2013 and includes both instrument and consumable revenues. The 2014 figure includes instrument and consumables revenues for a total of 1,140 estimated Ion Proton instruments installed from 2012 to 2014.

Under this scenario, Ion Proton would add $.03 to EPS in 2013 and $.17 to EPS in 2014.

If the Ion Proton trajectory mirrored the success of adoption of the PGM, estimates for the Ion Proton are even greater. Since shipping the PGM starting in the first quarter of 2011, about 800 systems have been placed, Ferreiro estimated.

Based on that, about 900 Ion Protons would be placed in 2013, he said, translating to $264.0 million in total Ion Proton revenues. In 2014, 800 Ion Protons would be placed, resulting in total system revenues of $428.4 million.

Under this scenario, the 2013 estimate is based on a total of 1,040 instrument placements between 2012 and 2013 and includes both instrument and consumable revenues. The 2014 figure includes instrument and consumables revenues for a total of 1,840 estimated instrument placements from 2012 to 2014.

EPS would increase by $.06 in 2013 under the PGM scenario, Ferriero estimated, while in 2014 EPS would swell by $.39.

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