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Illumina Drops Plans for Lower-Throughput NovaSeq System as It Eyes Clinical Market Growth


SAN FRANCISCO (GenomeWeb) – Illumina has scrapped its plans to launch NovaSeq 5000, a slightly lower-cost and lower-throughput version of its NovaSeq 6000 system, CEO Francis deSouza said this week, and the firm is expecting a recent decision by United Healthcare to be a boon for clinical sequencing.

DeSouza said during a conference call discussing the firm's third quarter results that United Healthcare had recently updated its medical policy and will begin covering exome sequencing tests for rare, undiagnosed diseases. He expects that decision will further drive the already growing clinical sequencing market.

Illumina's plans to hold off on the launch of the new NovaSeq system comes after the launch last month to early-access customers of its S4 flow cell, which enables up to 6 terabases of output on the NovaSeq 6000. The new flow cell is now broadly available, and feedback from initial runs at seven early-access sites have been "very positive with performance exceeding specifications," he said. The new flow cell is "suited for high-intensity sequencing applications" and will reduce sequencing costs per sample below those achieved on the HiSeq X system, deSouza said. As such, he said that he expects HiSeq X customers to begin upgrading to NovaSeq.

In addition, deSouza said that the firm is on track to launch its Xp workflow before the end of the year. The Xp workflow, which the company announced in April, will allow customers to load different sequencing libraries in individual flow cell lanes, which will enable customers to use less input DNA and run multiple types of sequencing experiments in one run.

Due to its focus on the Xp workflow, Illumina has delayed the launch of its S1 flow cell, and now expects to launch it in the first quarter of next year. The S1 flow cell will be NovaSeq's lowest output flow cell, generating up to 1 terabase of data per run.

In addition, it has suspended plans to launch the S3 flow cell and canceled plans for the NovaSeq 5000. DeSouza said the company made these decisions based on customer feedback and customer interest in the NovaSeq 6000. The S3 flow cell would have had an output of up to 4 terabases per run, but deSouza said that customers voiced preference for either the higher-throughput S4 flow cell or the flow cells at the lower ranges.

As it has done with other sequencing instruments, Illumina had originally planned to launch two versions of the NovaSeq, one that would be a lower-cost, lower-throughput version. But, deSouza said that it decided to scrap that plan. "We believe the NovaSeq 6000 fully meets all customer needs and enables greater flexibility," he said, adding that customers had expressed a strong preference for the NovaSeq 6000 and were "not asking for or waiting for the 5000."

Indeed, he said that orders of NovaSeq have exceeded the firm's initial expectations, with nearly 200 systems shipped during the year, including more than 80 in the third quarter. Customers placed orders for 70 NovaSeq instruments in Q3 and the firm now has a backlog of 100 NovaSeqs. DeSouza added that shipments will no longer be constrained by manufacturing capacity.

Consistent with the previous quarter, most NovaSeq orders were from existing HiSeq customers, and deSouza said that the firm expects most of its 800 HiSeq customers to convert to NovaSeq with a smaller subset choosing to convert to NextSeq.

Also consistent with the previous quarter, about one-third of NovaSeq orders were from customers who had not previously owned an NGS instrument or from customers who were scaling up from benchtop instruments. For instance, deSouza said that a children's hospital in North America had previously been outsourcing its NGS needs, but purchased a NovaSeq this past quarter to bring sequencing in house. Similarly, a customer who had relied on MiSeq and NextSeq ordered NovaSeq to "leverage increased throughput on a system that has a smaller footprint overall" than multiple lower-throughput systems and would offer "lower cost per sample," deSouza said.

Clinical market

Earlier this month, United Healthcare updated its medical policy to include new recommendations related to molecular testing. Included in those changes is coverage of exome sequencing for diagnosing rare genetic disorders for non-specific clinical presentations that do not fit a well-defined syndrome with an available single-gene or panel test. The payor will also cover trio exome sequencing. It noted, however, that it considers whole-genome sequencing to be unproven and "not medically necessary for any disorder."

The new policy takes effect starting in November, and deSouza said that now more than 100 million lives will be covered for exome sequencing for rare diseases in the US.

United Healthcare also said it would cover multi-gene cancer panels of up to 50 genes for patients with metastatic non-small cell lung cancer as well as some gene expression profiling tests for various cancers. However, it deemed expanded carrier screening panel testing and pharmacogenetic testing as unproven and not medically necessary.

Overall, deSouza said sales to Illumina's clinical customers grew by 35 percent in the quarter, driven particularly by translational liquid biopsy studies and oncology as a whole. Going forward, deSouza said he expects sequencing to play an important role in discovery of immunotherapy targets, adding that there are now approximately 1,000 immunoncology drugs in clinical trials in the US.