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Illumina Predicts Recent Regulatory, Reimbursement Decisions Will Drive Oncology, Consumer Markets


SAN FRANCISCO (GenomeWeb) – Recent reimbursement and regulatory decisions surrounding next-generation sequencing-based diagnostics and the direct-to-consumer genetic testing market will be a boon for Illumina, the company predicted this week.

During a conference call discussing its first quarter 2018 performance, Illumina President and CEO Francis deSouza said that the firm is "definitely seeing a much more favorable market starting to emerge both on the regulatory and reimbursement side." DeSouza cited recent US Food and Drug Administration approvals of NGS-based companion diagnostics and DTC genetic tests, as well as last month's coverage decision by the Centers for Medicare & Medicaid Services for NGS-based oncology tests, as examples.

In addition, deSouza said during the call that following an initial limited launch of its newest sequencing instrument, called iSeq, the firm has identified a number of improvements it plans to make before scaling up the launch later this year.

DeSouza said that Illumina has received almost 100 orders for the iSeq, which combines sequencing-by-synthesis technology with CMOS detection technology. The company plans to make improvements to cartridge filling and shipping in order to enhance the robustness and reliability of the system. DeSouza added that the firm is currently "validating these improvements and expects to scale shipments midyear."

Illumina has been pushing into the clinical market for the past several years, and in January it predicted that its clinical business would soon outpace its research business. But, while previous efforts have focused on developing technologies for clinical markets, it is now also focusing on having an impact on the regulatory and reimbursement side. To further these efforts, it recently hired Phillip Febbo as chief medical officer.

DeSouza said this week that Febbo, who was previously Genomic Health's chief medical officer, would focus on driving genomic testing into clinical practice — "one of Illumina's highest priorities." As part of that work, he will play a key role in developing partnerships with both the payor community to conduct clinical utility studies and economic analyses, as well as regulatory agencies around the world.

Puneet Souda, an analyst with Leerink Partners, wrote in a note to investors that Illumina is now moving beyond simply "supporting its clinical customers with sequencing tools" to "finally placing its weight behind the regulatory and reimbursement efforts in order to expand its clinical markets, provide broader access to its customers' tests, be more a partner than a competitor, and drive increasingly more clinical utilization longer term."


Illumina's strategy in oncology is two-fold, deSouza said. It is both investing in partnerships to create companion diagnostics and also enabling customers to develop their own tests. Oncology is "one of the most exciting opportunities in sequencing," deSouza said.

He noted that the firm's recent agreements with Bristol-Myers Squibb and Loxo Oncology to develop NGS-based companion diagnostics were examples of how it plans to forge partnerships. Under those agreements, the companies will collaborate to bring Illumina's TruSight Tumor 170 and TruSight Oncology 500 panels through FDA clearance. 

Illumina is working to develop its TST 170 panel as a CDx for two of Loxo's pan-cancer drugs. In collaboration with BMS, it is working to develop a larger panel that assesses all known biomarkers for cancer drugs including tumor mutation burden and microsatellite instability, to predict whether patients will respond to immunotherapy checkpoint inhibitors.

The recent surge in interest in immunotherapies has had a positive impact on Illumina's oncology business in other ways, deSouza noted. For instance, other Illumina customers, like Foundation Medicine and Caris Life Sciences, are developing their own assays on Illumina sequencing technology to predict response to immunotherapy, and on the research side, US National Institutes of Health funding for immuno-oncology studies has been growing at 11 percent over the last five years, deSouza said. Within that, sequencing-based immuno-oncology research has been growing at more than 40 percent year over year.

Immuno-oncology is not limited to the US, he added, with growing interest globally, including in China.

"Our customers are seeing mounting awareness and acceptance of NGS-based [oncology] panels," deSouza said.

Consumer genomics

Illumina's microarray business has continued to be a somewhat surprising source of growth, driven predominantly by the consumer market. DeSouza said that following an inflection point in the DTC market in 2017, the microarray business "had a spectacular start to 2018," growing 48 percent.

Again, he noted that recent regulatory decisions have helped fuel demand for DTC testing. In March, the FDA approved 23andMe's array-based test for BRCA mutations, marking the first approved DTC test for cancer risk.

The decision follows on last year's approval of 10 DTC genetic health risk reports from 23andMe for Parkinson’s disease, late-onset Alzheimer’s disease, celiac disease, alpha-1 antitrypsin deficiency, early-onset primary dystonia, factor XI deficiency, Gaucher disease type 1, glucose-6-phosphate dehydrogenase deficiency, hereditary hemochromatosis, and hereditary thrombophilia. 

DeSouza noted that last year the FDA had indicated that it would not approve cancer predisposition testing, so the approval of the BRCA report marked "really good progress." He added that the FDA was looking for evidence that consumers would be able to understand the information in a cancer predisposition report. 23andMe's BRCA test is still rather limited in scope, however, analyzing only three mutations most commonly found in people of Ashkenazi Jewish descent.  

DeSouza also said he expects other DTC firms to seek regulatory approvals for health tests. For instance, he said that Helix's recent partnership with PerkinElmer indicated that the firm has aspirations to move into the health and disease risk testing space.