This article was originally published on July 27.
By Ben Butkus
Illumina said today that it has acquired privately held real-time PCR and nucleic acid-analysis firm Helixis in a deal that could be worth as much as $105 million.
Concurrent to the announcement, Illumina unveiled a new benchtop PCR instrument developed by Helixis, called the Eco real-time PCR system, that it said will cost about a quarter the price of existing PCR systems while delivering the same level of performance.
Illumina disclosed the news about Helixis in a statement and conference call discussing its second-quarter 2010 financial results.
Final terms of the acquisition, which Illumina initiated on April 30, call for Illumina to pay $70 million in cash and up to $35 million in contingent consideration payments based on the achievement of certain revenue-based milestones through Dec. 31, 2011.
Helixis was founded in 2007 based on intellectual property licensed from the California Institute of Technology and with $10 million in financial backing from investors led by Domain Associates and Okapi Venture Capital.
The company began as a molecular diagnostics firm, but over time shifted its focus on developing a qPCR system called the Pixo that would sell at a much lower price point than competing systems but retain the performance standards of more expensive instruments.
During Illumina's Q2 earnings conference call, President and CEO Jay Flatley said that the company has now launched the Pixo system as the Eco, which "has been designed to deliver high-performance qPCR applications with a compact footprint at a very low cost to the individual researcher."
At a US list price of $13,900, the system will cost "a quarter of the price of systems on the market with comparable performance," Flatley said, adding that Illumina believes that "the combination of performance features and market-disruptive pricing make this a system ideal for personal use in the laboratory."
Illumina said that specific features of the Eco include "true four-color multiplexing" and high-resolution melting analysis; use of all standard real-time PCR chemistries; data quality and reproducibility with well-to-well uniformity five times that of other commercially available systems; a bench top footprint of one cubic foot; a 48-well plate format; and an icon-driven software interface with smart default protocols.
In regards to how the Eco system will fit within Illumina's current product portfolio, Flatley said that it complements the company's BeadXpress system, a bead-based multiplex molecular testing platform that is used for applications such as low- to mid-plex genotyping and methylation Analysis, SNP screening, and protein screening.
The Eco will "enable us to more cost-effectively address the market below a complexity of 96 markers," Flatley said. "BeadXpress goes down to the single marker, but as you drop below 40 or 30 markers … it becomes less competitive, and of course PCR is more competitive in the lower-complexity space."
The acquisition of Helixis and launch of the Eco also marks Illumina's entry into the qPCR space. When asked by an investor about Illumina's view of this market and entry strategy, Flatley said "it's a very important market segment in the tool space," and that it was "large from a dollar perspective," though he didn't elaborate.
"It's very consistent with our strategy of having tools that address the broad range of complexity that customers want all the way from full sequence down to single marker," Flatley said. "And this is a technology that reinforces that to a great extent on the very low end."
Flatley also noted that Illumina has somewhat of a built-in market for sales of Eco because "most of the customers that are using our sequencing instruments require PCR instrumentation in the front end or the sample prep process for preparing the sequencing sample. That's an important synergy we get right out of the box."
Initially, the Eco system will run most commercially available qPCR assays, Flatley said. However, eventually Illumina plans to develop and market its own consumable kits specifically designed for the Eco system, "which will create that high-margin follow-on business," he said.
Flatley said that Illumina will begin shipping the Eco system next month.