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Illumina Puts Spotlight on Clinical NGS Opportunities, Cites Contributions to Coronavirus Response

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NEW YORK – Illumina's clinical next-generation sequencing business grew fast in 2019, and 2020 could bring even more opportunities to grow clinical consumables sales, according to company officials.

Clinical sequencing consumables, including reagents for oncology, reproductive health, and genetics applications, accounted for just over 40 percent of all consumables shipments last year, totaling approximately $830 million, and grew 20 percent year over year, Illumina officials said on Wednesday during a conference call to discuss the firm's 2019 financial results.

Along with growth in partnership revenue, clinical sequencing consumables growth in the fourth quarter helped Illumina beat Wall Street revenue projections, despite a decrease in sequencing instrument sales.

For the full year, oncology applications accounted for 20 percent of all sequencing consumables revenues. Though officials did not provide year-over-year growth for oncology revenues, they noted that the segment grew faster than total clinical consumables revenues, driven by increased adoption of NGS panels, including comprehensive profiling panels.

Increased reimbursement for companion diagnostic tests from firms like Foundation Medicine and Guardant Health (as well as Guardant's LUNAR trial) were helping to drive those revenues, said Francis deSouza, Illumina's president and CEO.

The reproductive health segment, including noninvasive prenatal testing, accounted for just over 10 percent of all sequencing consumables revenue, thanks to broader reimbursement of NIPT and 80 percent growth in VeriSeq NIPT sample volumes in Europe.

Genetic disease testing accounted for 10 percent of clinical sequencing revenues, driven by companies like Centogene and Ambry Genetics.

Though overall sequencing systems revenues had slowed at the end of 2019, deSouza said demand for the mid-throughput NextSeq 550Dx continued to grow and he expected the pipeline to remain strong. MiSeqDx sales in China have been strong since the National Medical Products Administration cleared the platform in August 2018, he said, and with Japan's PMDA clearing that instrument this month, Illumina expects placements in that country soon.

The market potential in clinical NGS will even help ease the pain of the failed Pacific Bioscience acquisition, he suggested. 

The long-read market "dwarfs in comparison to the clinical market opportunity, which is much, much larger," deSouza said. "In terms of tradeoffs we would do internally, it's not even close, when you think about spending to drive the oncology market forward, versus the long-read market."

While deSouza seemed to indicate that clinical sequencing would take priority in the short term, he reiterated that Illumina is working on long-read technology and will continue to do so. "What we wanted to do was try and accelerate [the long-read] market," by bringing down the price and operating costs of instruments with engineering, he said. "We know there's a knock-on effect of 'what's good for that market is good for our market.' Because once you sequence a new species, for example, you do the bulk sequencing in that species on short-read [sequencers.]"

"We are going to continue to look for ways to move that market more quickly than it is moving now, but it's a small part of the overall sequencing market," deSouza said.

With regard to new sequencing platforms, the new blue-green chemistry and integrated Dragen hardware seen in the recently announced NextSeq 1000 and 2000 instruments are now "core architectural components in our toolkit," deSouza said, and "there's no reason [those technologies] can't show up in any of our future instruments, both up and down the portfolio."

Illumina is also involved in the response to the global 2019-nCoV coronavirus outbreak centered on Wuhan, China. Analysts pressed deSouza for comment on whether the outbreak could affect revenues in that country; however, he said it is too early to tell and any effect on business would be predicated on speculation that people would be less likely to visit hospitals for reproductive health or oncology testing due to the virus.

Scientists have used Illumina platforms, for example, to sequence the virus' genome and publish it in public databases, which has enabled diagnostic testing with RT-PCR. "Our team actively is working with China CDC labs to provide coronavirus NGS testing protocols and to provide necessary training," deSouza added. "We're also working with our supply chain team to ensure that systems and consumables are delivered to labs working with novel coronavirus as quickly as possible. We plan to share these NGS testing protocols with customers, to support the global infectious disease community as it mobilizes." Illumina is also exploring donating consumables and other resources, he added.

In response to analysts' questions on how the coronavirus could impact Illumina's business, deSouza said the firm expects growth in China in 2020, driven by clinical sequencing, but stressed it was too early to tell if the outbreak would affect business. He said Illumina was watching the situation closely and was "deeply engaged" in the situation. While front-line testing will be done with PCR, NGS could be used to confirm the strain in patients or in "last resort testing" for inconclusive PCR-based tests. He noted these were observations Illumina gleaned from previous responses to coronaviruses, including SARS and MERS.

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