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Illumina to Launch New NovaSeq Chip, iSeq Kit; Grow Oncology and Reproductive Health Business

SAN FRANCISCO (GenomeWeb) – Illumina plans to launch a new chip for its NovaSeq instrument and upgrades to the iSeq sequencer in the first quarter of 2019, according to a presentation at the JP Morgan Healthcare Conference. Unlike in previous years, the company did not launch or preview a new sequencing instrument this time.

Illumina also continues to expand its footprint in the clinical space. According President and CEO Francis deSouza, it has launched a research version of its TruSight Oncology 500 assay and is working to develop a clinical version. It will also launch an expanded version of its VeriSeq NIPT assay in the first half of the year.

In addition, deSouza reported that the company's fourth quarter preliminary revenues increased by 11 percent to $865 million year over year, while full year preliminary revenues jumped by 21 percent to $3.3 billion.

The planned SP chip for the NovaSeq will have the "fastest run time, lowest run cost, and longest reads," deSouza said. Also in Q1, Illumina plans to launch upgraded consumables for its iSeq benchtop system to enable 250-base paired-end reads as well as a 1.7x increase in output and a 20 percent decrease in price per gigabase.

Illumina is increasingly moving into the clinical space, both through seeking regulatory approvals for its sequencing instruments as well as by developing clinical assays. Following the approval of the MiSeqDx for diagnostic testing in China by the country's National Drug Administration in August, deSouza said, the firm is working with partners in China to also bring the MiniSeq through regulatory clearance. Specifically, it is working with KingMed Diagnostics for oncology and with another Chinese firm for genetic diseases, he noted.

DeSouza also said that the firm has launched its TruSight Oncology 500 assay for research and pharmaceutical companies. The pan-cancer DNA and RNA panel includes testing for tumor mutation burden and microsatellite instability — biomarkers that are increasingly recognized as being important for immunotherapy response. The current version of Illumina's TSO 500 assay is for formalin-fixed paraffin-embedded samples but deSouza said the company is collaborating with pharmaceutical partners to develop a version that would work in blood.

The Frederick National Laboratory for Cancer Research has selected TSO 500 for several National Cancer Institute-sponsored clinical studies, he said. As part of a five-year collaboration, the assay will be used on liquid biopsies to assess up to 7,000 patient samples, deSouza said, including one study that will investigate concordance between circulating tumor DNA and matched tissue.

TSO 500 would put Illumina in direct competition with a number of its customers, including Foundation Medicine and Guardant Health, both of which have also developed liquid biopsy assays that analyze TMB. Foundation Medicine, a unit of Roche, is also looking to develop a blood-based version of its tumor mutational burden assay as a companion diagnostic for the immunotherapy drug Tecentriq (atezolizumab).

In addition, last year, the US Food and Drug Administration granted Foundation Medicine breakthrough device designation for an expanded version of its liquid biopsy assay that includes TMB and MSI. Guardant Health, too, has been studying whether its Guardant 360 liquid biopsy can measure TMB and predict response to immunotherapy and has launched its Omni assay, a 500-gene panel that includes TMB, specifically for pharmaceutical companies to use in their immuno-oncology drug development.

In response to a question about Illumina's relationships with its oncology customers given the launch of TSO 500, deSouza noted that "customers like Foundation Medicine will always continue to push the edge," but the "rest of the market may not have the expertise to do what Foundation does. ... The market moves forward when you have a standardized panel," he said, which is where Illumina aims to position its TSO 500 panel.

For its other clinical business, reproductive health, Illumina plans to launch version two of the VeriSeq NIPT assay in the first half of this year, deSouza said. The test will be expanded to assess aneuploidies genome-wide instead of just trisomies 21, 18, and 13 and sex chromosome abnormalities.

DeSouza also said that Illumina plans to collaborate with the Mayo Clinic to develop whole-genome sequencing products that will "enable comprehensive genome-wide analysis," allowing customers to "rapidly identify disease-causing variants and provide precision medicine to patients." DeSouza did not disclose further details of the collaboration but noted that already there are 147 million lives covered in the rare and undiagnosed diseases space for exome sequencing and that the Centers for Medicare and Medicaid Services recently set a price of $5,000 for whole-genome sequencing-based tests, a "critical benchmark."

With regard to its recently announced acquisition of single-molecule sequencing firm Pacific Biosciences, deSouza noted that he still expects the deal to close mid-year.

2018 financials

DeSouza said that the company's full-year 2018 revenues of $3.3 billion were driven primarily by growth in its sequencing business. Sequencing consumables revenues grew 23 percent in 2018 while revenues from sequencing instruments grew 10 percent. The microarray business was also strong, with 22 percent growth.

In Q4, Illumina recognized revenues of $865 million, up 11 percent from $778 million in Q4 2017. DeSouza said Q4 saw record sales of sequencing systems, including record shipments of its NovaSeq system.

For 2019, the firm estimates revenue will grow between 13 percent and 14 percent to between $3.76 billion and $3.8 billion. It anticipates GAAP EPS between $6.07 and $6.17 and non-GAAP EPS between $6.50 and $6.60, excluding the impact of the PacBio acquisition.

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