By Julia Karow
This article was originally published July 28.
Illumina last week launched a human whole-genome sequencing service for researchers, pitting it directly against Complete Genomics and other providers of such services.
The service, offered by Illumina through subcontracting partners that are part of the "Illumina Genome Network," is available immediately and will focus solely on whole-genome sequencing services for large-scale projects.
"[Sequencing] services will be increasing, and therefore we wanted to have a really strong position in that market segment, and we intend to be the leader there as well," said Jay Flatley, Illumina's president and CEO, during a conference call to discuss the firm's second-quarter earnings last week.
So far, Illumina has signed up as sequencing partners the Genomic Medicine Institute at Seoul National University together with Macrogen in Korea, and the National Center for Genome Resources in New Mexico.
It is in discussions with other institutions, including the Broad Institute, China's BGI, the University of Washington Department of Genome Sciences, and Decode Genetics.
Illumina said it aims to include in its provider network "leading academic and commercial institutions worldwide that can rapidly process large-scale sequencing projects" and that have been certified by the company as service providers under its CSPro program. In addition, the company will use its in-house sequencing capacity as needed.
According to Flatley, the network "will broaden access for researchers worldwide to the Illumina sequencing platform" and provide them with "the unmatched value proposition of rapid turnaround time, industry-standard data quality, and highly competitive project costs." He did not provide pricing information for the service.
Illumina will be "the hub" of the network and will be responsible for marketing and selling the service and contracting out the sequencing work out to its partners.
The company opted to form an alliance with users of its sequencing platform, rather than offer the service solely through its own facilities, in order to avoid the "natural tension" that arises when an instrumentation vendor bids against its own customers on service projects, Flatley explained.
According to GATC Biotech, a CSPro-certified provider of Illumina sequencing services that is not yet part of the Genome Network, the network is a "valuable co-marketing strategy between Illumina and their CSPro certified service providers" and the company, which has applied to become a member, does not expect to incur any costs as part of it.
"It does make sense for a service provider to become a partner in Illumina's Genome Network as it provides additional valuable sales channels and opportunities for search engine optimization for the website," according to the spokesperson. After finding a provider, customers can still decide whether to contact the provider directly or through Illumina, she said. "They've simply got more choices."
The network model will also allow Illumina to distribute incoming projects according to the sequencing capacity currently available at its partner institutions, according to Flatley. "It could be that one institute at one particular time has more capacity than someone else," he said. "In the case that none of them have enough capacity, we will do it in house at Illumina."
In addition, many of its partners bring specific expertise to the table, for example in bioinformatics or advanced sample preparation methods, so Illumina can direct a customer's project to the most appropriate partner.
Increased demand for human whole-genome sequencing services drove Illumina's decision to beef up its service offering, which in the second quarter accounted for less than $13.5 million of its $212 million total revenues (see related story, this issue). "We did see some large projects forming where customers want to sequence 50 to a couple of hundred genomes in a single project, and we thought we needed an infrastructure that allowed us to take on that business very directly through Illumina," Flatley said.
Although sequencing services are currently "still a very small part of the market," Flatley said, "there is the potential, as the price comes down, that it will become an increasing portion."
While most of its customers today are interested in purchasing sequencing instrumentation rather than services, that might change in the future, he said, and "we clearly want to be the leader in services as well as instruments."
Illumina's entry into the human whole-genome sequencing service business will put it in direct competition with Complete Genomics, which solely provides such services to the research community using its own proprietary sequencing technology.
As of February, Complete Genomics had orders for more than 500 human genomes from over 30 customers, including three projects with at least 100 genomes each (IS 2/23/2010).
The company's stated goal is to sequence 5,000 human genomes this year in its Mountain View, Calif., facility and to build 10 additional sequencing centers around the world over the next few years.
Illumina, through its partnership with GMI/Macrogen, already has an international presence in Korea today, and could add China if its partnership with BGI pans out.
However, BGI has its own aspirations to become an international provider of sequencing services. The institute recently opened two branches, BGI Americas and BGI Europe — headquartered in Boston and Copenhagen, Denmark, respectively — and plans to build sequencing facilities for both. In addition, it wants to open locations in Southeast Asia and Australia (IS 5/25/2010).
Illumina will also compete with smaller providers of human whole-genome sequencing services, for example Knome, which offers both sequencing and interpretation services to researchers and individuals and uses BGI as its main sequencing contractor.