This story was published on July 25.
NEW YORK (GenomeWeb) – Illumina's newest next-generation sequencing systems — the HiSeq X Ten and NextSeq 500 — helped drive record revenues in the second quarter this year, the company reported this week.
Total Q2 revenues grew 29 percent year over year to $448 million from $346 million in the second quarter of 2013. Revenues from the sequencing business saw an even higher jump, growing 44 percent from the same period last year. See GenomeWeb Daily News coverage for complete details on Illumina's Q2 financials.
This quarter, Illumina also began shipping its TruSeq synthetic long read kit, which is based on the Moleculo technology and can generate synthetic reads up to around 10 kb.
Launch of its NeoPrep sample prep system, which uses microfluidic technology it acquired from Advanced Liquid Logic, has been pushed back by a couple of months for extensive testing to ensure that the system is robust, Flatley said. The company still plans to launch the system along with six assays this year.
HiSeq X Ten and NextSeq 500
The HiSeq X Ten system has seen greater demand than even the company's "most aggressive assumptions," Illumina CEO Jay Flatley said during a conference call discussing the firm's results.
In the second quarter, Illumina sold four more systems, including one to Baylor College of Medicine, one to Sidra Medical and Research Center, and two to customers wishing to remain unnamed.
When Illumina initially launched the HiSeq X Ten, it projected it would ship around five systems in 2014 due to their complexity. The HiSeq X Ten system is sold as a 10-unit system costing $10 million. Each individual unit can generate 600 gigabases of data in one day. Already though, 14 customers have ordered the system for a total of 144 individual HiSeq X units, Flatley said on the call.
The HiSeq X Ten uses Illumina's ordered array technology to increase cluster density and decrease turnaround time, and also incorporates high-resolution cameras that are manufactured externally. HiSeq X Ten manufacturing capacity is governed by the supply of the cameras and production of the patterned flow cells. Earlier this year, Flatley said the company was evaluating whether it could scale production of the flow cells to meet the higher-than-expected demand for the HiSeq X Ten systems, and this week, he said that production is "steadily improving and is no longer a gating factor for HiSeq X Ten shipments."
Flatley added that the company has been somewhat surprised by the diversity of customers interested in the HiSeq X Ten system. He said that Illumina initially thought only customers with expertise in next-generation sequencing would want to buy the systems, but he said that about half of the customers and potential customers do not have expertise in NGS, "requiring us to put more capabilities around the software."
Orders and shipments of the Illumina NextSeq 500 were sequentially higher than the previous quarter and the Flatley said that the system has "hit a sweet spot" in the areas of oncology, noninvasive prenatal testing, and microbiology, Flatley said.
Half of all NextSeq 500 orders were from commercial customers and the system's quality scores and output are exceeding specifications, with 85 percent of reads at Q30 or above and run throughput as high as 140 Gb, Flatley said.
MiSeq and HiSeq
The success of Illumina's new instruments seemed to have little impact on orders for MiSeq and HiSeq. Specifically, Flatley said that cannibalization of MiSeq by NextSeq was "insignificant."
MiSeq orders benefitted from a bundling promotion Illumina offered to customers that purchased both the NextSeq 500 and MiSeq together and the trade-in program for third party instruments, Flatley said.
Approximately 70 percent of MiSeq orders were from new customers and about two-thirds of orders were for translational, commercial, and clinical customers. In addition, Illumina received "follow on multi-unit orders from customers building capacity in production unit facilities and from public health institutions," including the US Food and Drug Administration and the Centers for Disease Control, he said.
HiSeq shipments were higher both sequentially and year over year. In particular, demand for the HiSeq 2500 was extremely strong and in the second quarter, there were 10 multi-unit orders for the 2500, including even from customers that had purchased a HiSeq X Ten system and were "looking to supplement their fleet for applications outside of whole-genome sequencing," Flatley said.
Half of all HiSeq 2500 orders were from existing customers that are building out capacity as well as customers wanting to gain access to the 1 Tb chemistry. Approximately one-third of customers that are eligible for the upgrade to the 1 Tb chemistry have purchased it so far, Flatley said.
Illumina will begin shipping the 2x250 bp read length kit for the 2500 in the fourth quarter of this year. "The 2500 remains a very important part of our instrument portfolio with a long road map ahead of it, including regulatory clearance and read length enhancements," Flatley said.
Illumina's systems are increasingly being used for clinical purposes, and going forward the company is focused on driving adoption of its products in the clinic, Flatley said. In Q2, commercial, non-profit and hospital customers accounted for approximately half of all shipments, Flatley said. In the Americas, clinical orders grew by more than 50 percent in the first half of the year compared to the prior year.
In addition, Illumina acquired regulatory and quality consulting firm Myraqa to strengthen its support in that area as it looks to bring products through FDA clearance.
For further details about Illumina's clinical business, see Clinical Sequencing News coverage, here.