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MiSeq Customers, WGS Service, and T21 Test Developers Drive Illumina's Clinical Business

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Companies offering sequencing-based trisomy 21 tests are Illumina's largest clinical customers, CEO Jay Flatley said this week during a conference call discussing Illumina's 2012 third-quarter earnings.

Additionally, customers purchasing the MiSeq for targeted sequencing assay development are another significant clinical driver.

Illumina's services business, which includes its FastTrack and Individual Genome Sequencing services, also helped drive the company's clinical business, bringing in $23.5 million in revenue for the quarter, a 54 percent increase over $15.2 million in the year-ago quarter.

Flatley did not break out what portion of that was for clinical sequencing, but said that the addition of the rapid turnaround genomes in the CLIA lab has spurred growth in the company's sequencing business, with the predominant users being pediatric patients and cancer patients.

Flatley noted that the company this week held its Understand Your Genome symposium that was attended by around 70 healthcare professionals, scientists, policy makers, and consumers. Some attendees had their genomes sequenced and annotated by Illumina's clinical geneticists and were able to explore their genomic data using Illumina's MyGenome iPad app.

"We'll continue programs such as this to lay the groundwork for routine clinical use of whole-genome sequencing," Flatley said.

While the company did not break out its revenues by product line or end market, instrument revenue grew 15 percent year over year, due primarily to the MiSeq. More than half of MiSeq customers are non-academic, "with a growing presence in clinical and applied markets," Flatley said.

Additionally, Flatley said that the company has been focusing on translational genomics and clinical segments of the market and, as a result, approximately 30 percent of the company's revenue comes from non-academic and non-government customers, which includes both the commercial clinical market and applied markets.

Looking ahead to 2013, Flatley said that the company would continue to invest in its diagnostics and translational businesses. For example, he said that the company plans to invest in clinical trials to bring its own diagnostic products through the regulatory process — between $1 million and $4 million per trial.

The company is planning to build additional research-use only panels, similar to its TruSight panels it recently launched (CSN 9/12/2012), as well as "true diagnostic" panels. It will also continue to build out its sales force, particularly for the BlueGnome business that it acquired last month for $88 million in cash (CSN 9/19/2012).

Currently, Illumina's largest clinical sequencing customer base comprises a group of companies that provide trisomy 21 testing, including Sequenom, Ariosa, Verinata Health, and LifeCodexx, Flatley said.

"These are a clinical set of customers that are beyond the assay development phase and are ramping up to quite high volumes and are becoming a significant customer base for us," Flatley said.

Other clinical customers are largely those that are developing targeted sequencing-based tests, many of which are still in the panel development stage. Flatley predicted that many of these clinical customers would begin using TruSight panels that the company recently released as research-use only products, "because it gives them a great baseline to start with."

Clinical users "run the gamut" from "the LabCorps, Quests, and Mayos of the world, [to] the cancer centers, down to the small regional labs, and the university hospital labs," he said.

Another trend the company began seeing in this quarter, said Flatley, is that customers are buying multiple MiSeq units. This quarter, around 20 percent of orders were for multiple systems.

In the future, Illumina expects significant clinical revenues from its acquisition of BlueGnome, which contributed $1 million to revenues in the third quarter. Illumina acquired BlueGnome, which makes microarray-based products for preimplantation genetic screening and cytogenetics last month, and the company said then that that it would develop both microarray- and sequencing-based products.

Additionally, it expects that its TruSight panels and a collaboration with Partners HealthCare that it signed last month will further strengthen the clinical business.

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