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Illumina Reaches 1K Mark for Eco PCR Sales; Plans to Focus More on 'Low-Plex' Platforms

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Illumina President and CEO Jay Flatley said this week that the company has installed nearly 1,000 of its Eco real-time PCR systems since it launched the platform in July 2010 after acquiring biotech firm Helixis.

Flatley also said that the company in the near term plans to place more emphasis on its non-core product lines such as the Eco and the BeadXpress, as well as clinical markets, as a consequence of a restructuring that it disclosed this week.

Flatley made his remarks during a conference call discussing Illumina's third-quarter financial results, which included a 1 percent year-over-year decline in revenues; an 18 percent drop in instrumentation revenue; and a 9 percent uptick in consumables revenues.

During the Q&A portion of the Q3 conference call, an analyst asked Flatley about the company's plans to diversify its business to help alleviate the slowdown in instrumentation sales in the face of tightened research spending, and to help compete with competitors offering similar product portfolios.

In response, Flatley said that the company is beginning to diversify its business by focusing on diagnostics, clinical sequencing, and agricultural bio; as well as by developing specific applications optimized for its microarray and sequencing platforms.

In addition, Flatley remarked that the company will "continue to push in other emerging new markets … such as the PCR market and the Eco product. We're now approaching an installed base coming up at about 1,000 units for Eco, and you're going to see us continue to push that technology. And we're working very hard on the reagent side of that because all of the revenue thus far has been just from the instrument placements. There's even a bigger market opportunity for reagents as we begin to bring those to market in 2012."

During the call, several analysts also asked executives whether the company's plans to eliminate 200 jobs from its global workforce would affect its ability to conduct R&D or effectively market new products.

"The restructuring we're going to do here will not affect either our core development programs or our market channel," Flatley said. "We think that all of that will remain intact and not in any way diminish our ability to compete effectively in the market either technologically or commercially."

Flatley added that the restructuring would allow the company to reorganize internally in order to put a greater focus on clinical markets. In addition, he said that "the other area [where] we need to increase focus is in our low-plex business. One of the challenges we've had with the lower-plex products [such as] BeadXpress and Eco is getting sufficient organizational attention on those products, given the very … high-end and high-priced sequencers and microarray products. So we'll probably from this organizational change get some improved focus on those areas, as well."

During the call, Flatley also highlighted recent "workflow enhancements" to the company's recently launched MiSeq sequencing platform, including the BaseSpace cloud computing initiative, TruSeq custom amplicon kits, and Nextera DNA sample prep kits.

"BaseSpace … removes a significant barrier for adoption of next-gen sequencing and should accelerate the migration of sequencing from capillary electrophoresis to our next-gen platforms," Flatley said.

In addition, Nextera kits "allow for the fastest and simplest sample prep today," Flatley added, noting that the kits now support 2-by-150 base-pair reads and sample indexing up to 96, and include reagents that have been optimized for PCR and reduced error rates.

"Finally, TruSeq custom amplicon kits … offer scalable multiplexed assays for rapid, cost-effective custom variant identification," Flatley said. "Researchers can now accomplish projects in several days that previously took several weeks or months."

For the three-month period ended Oct. 2, Illumina tallied revenues of $235.5 million compared to $237.3 million in the same quarter last year. Its product revenues were $220.3 million, down from $224.7 million; and its service and other revenues increased to $15.2 million from $12.6 million.

Instrument revenues were $72 million for the quarter, down 18 percent year over year; and consumables revenues were $145 million for the quarter, up from $133 million in Q3 2010.

The company ended the quarter with $229.8 million in cash and cash equivalents and $902.3 million in short-term investments.

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