NEW YORK – Illumina purchased Fluent BioSciences earlier this month, but so far hasn't revealed much about the deal, including its plans for how to market and further develop the single-cell sequencing technology.
"Fluent stood out as the most promising single-cell technology, and one that will allow us to expand the market, to reach new customers, and to enable experiments that are not practical today," Joel Fellis, VP of product management at Illumina, said in an email.
PIPseq, Fluent's method of isolating cells in emulsified droplets for RNA-seq without a specialized microfluidics-based instrument, "will allow us to address a broad range of customers, from smaller labs that don't have direct access to single-cell instrumentation to those looking to process millions of cells," Fellis added.
As previously disclosed, the deal was funded with cash on hand; as of March 31, Illumina had pro forma cash and cash equivalents of $877 million. The deal value was below thresholds that would have required Illumina to make a filing with the US Securities and Exchange Commission.
"In our opinion, the low acquisition price of Fluent (compared to the likely significantly higher valuation of other single-cell companies) was preferred," Canaccord Genuity analyst Kyle Mikson wrote in a note to investors. "We also think larger deals may have attracted antitrust attention — especially relevant in light of the recent spinoff of Grail," he wrote, adding that Fluent's connection to Illumina Ventures "likely contributed" to the decision to acquire it.
"A worldwide distribution network is going to open up more opportunities for researchers to use Fluent products outside of the US," Shane Liddelow, a researcher at New York University and a Fluent customer who has sequenced approximately 2 million cells using the technology, said in an email. "I think that is the major plus of the merger! Also, I'm sure Illumina has a lot of expertise and advice to help with increasing production, decreasing costs, and building out new iterations of the chemistry."
How the deal affects the balance between single-cell assay makers and Illumina, which makes the sequencers needed to read these assays out, isn't clear. Illumina said it plans to continue its partnership with 10x Genomics, the dominant force in the single-cell sequencing market.
"We'll always do what's in the best interest of our customers and their research, which is why we have and will continue to partner with all sequencing providers," a 10x spokesperson said in an email.
The deal exhibits a continued willingness for Illumina, even under new management, to dive into certain sequencing applications looking for more dollars from end users. It successfully did so with Verinata Health's noninvasive prenatal testing and its comprehensive genomic profiling cancer panels; however, the recent attempt with Grail and liquid biopsy led to years of headaches from regulators and activist investors who challenged the acquisition.
Established in 2018, Watertown, Massachusetts-based Fluent has commercialized single-cell isolation technology invented in the University of California, San Francisco lab of Adam Abate. The company's particle-templated instant partition (PIP) technology uses vortexing and barcoded hydrogel beads to create the conditions for uniform reactions in emulsified droplets for downstream RNA-seq.
In a note to investors, TD Cowen analyst Dan Brennen estimated sales at less than $10 million per year.
Fluent's chief differentiator is low library preparation cost per cell. In a recent benchmarking study posted to BioRxiv by researchers at Genentech, Fluent beat out all other technologies at $.05 per cell, for up to 20,000 cells. At more than 14 hours, the workflow time is one of the longer ones out there, and it was rated "bottom tier" for certain other metrics, including unique molecular indices (UMIs) and genes per cells.
Fellis noted that Fluent recently released a new version of PIPseq that offers improvements in sensitivity and other performance metrics and can analyze anywhere between 2,000 and 1 million cells. He added that the method can prepare libraries from fragile cells that are missed with other methods.
Prior to the acquisition, Fluent told GenomeWeb that the new version improves upon "gene and transcript sensitivity, differential gene expression, and assay reproducibility," compared to the version used in the Genentech benchmarking study.
One limitation of the technology is that it focuses "solely on single-cell gene expression" and not multiomics, according to Subbu Nambi, an analyst at Guggenheim Securities, and it does not yet work with formalin-fixed, paraffin-embedded tissue samples. "We view this acquisition as successful at fulfilling Illumina's search for an instrument-free single-cell/spatial solution to expand its product offerings, but do not necessarily view Fluent as the leading asset of this nature at this time," Nambi wrote. "However, this could change given Illumina's track record of innovation and stated plans to develop Fluent's existing technology into an end-to-end single-cell solution."
Developing "sample-to-answer solutions" was a stated goal of Illumina CEO Jacob Thaysen's in May following the release of Illumina's first quarter financial results. The firm also plans to provide more information on its overall strategy next month as part of an event broadcast to investors. In addition to offering a library prep assay, Fluent brings analysis software, PIPseeker. Fellis said Illumina sees "a great opportunity to build out the analysis capabilities for PIPseq by leveraging both Dragen and Partek Flow" — a bioinformatics acquisition Illumina announced in January.
Illumina will plug PIPseq into its commercial channels; however, the firm did not respond to a question about whether it would bundle the assay with sequencing reagents for single-cell experiments. "We are also eager to put PIPseq into the Illumina R&D engine and build out an exciting roadmap for future products," Fellis said.
"I was very happy to hear that Illumina had purchased Fluent," said Jamie Padilla, a researcher at the University of New Mexico who is a customer of both firms. "Illumina is the platinum standard for NGS, and I think with their resources that they will catapult Fluent products into the next phase." She added that she would like to see better cell recovery rate, the ability to target up to 1 million cells per reaction, and improvement on organoid samples, "which are becoming a replacement model for mice," she said.
Barclays analyst Luke Sergott told investors that the Fluent deal was "an incremental positive for Illumina and incrementally negative for 10x in the near-term, given the lower costs associated with Fluent." Shares of 10x fell 14 percent immediately following news of the acquisition but have recovered over the last several weeks.
Illumina said the acquisition "doesn't change our partnership plans with 10x or other single-cell companies." The firm added that it will "continue to sell Fluent products for use on Illumina and non-Illumina platforms." Fluent had partnerships with other sequencing instrument makers, including Element Biosciences, Singular Genomics, and Ultima Genomics.