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Illumina Aims to Push Genetics Beyond the Lab With $200 Genome – BNN Bloomberg

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Sep 29, 2022

Angelica Peebles, Bloomberg News
(Bloomberg) — Illumina Inc. says it can read a person’s entire genetic code for as little as $200 with its new sequencing machine, bringing the company within reach of its long-promised goal of the $100 genome.
Illumina on Thursday unveiled a new line of DNA sequencing machines it says are twice as fast and accurate as its earlier models. Together, those upgrades will bring the cost per genome down two-thirds from its current technology, Chief Executive Officer Francis deSouza said.
Many consumers have been introduced to their DNA through relatively low-cost tests like those marketed by 23andMe Holding Co. that analyze small snippets of the genome for clues to disease risk and ancestry. Whole-genome sequencing can provide a far clearer, more accurate view of patients’ genetic makeup that doctors can use to precisely identify some diseases, including certain forms of cancer and heart disease. However, the price of performing the tests, along with their interpretation, has been a barrier for many patients that companies have been trying to bridge.
More efficient machinery and materials reduce customer cost to sequencing one genome, or the complete set of genetic material, Illumina said, adding that costs would range from less than $200 per genome, with discounts for bulk use, to $240 for a higher-quality analysis. Slashing the price of reading DNA could allow the practice to move into the mainstream, where it might be used to better tailor medications or treatments to people or have other health benefits.
“This will be a huge force in terms of significantly increasing accessibility to genomics in a number of ways,” deSouza said in an interview ahead of the announcement. “It will democratize access to genomics by allowing sequencing to be offered to hospitals and researchers at much lower prices.”
Illumina announced the machines, the NovaSeq X series, on stage in San Diego on Thursday in a splashy ceremony, with the refrigerator-sized sequencers for view in a demo room. The company’s share price was down 3.29%, to $193.70, as of 1:52 p.m. in New York.
Despite promises of personalized medical care for the masses, genetic data has mostly been confined to research settings in the 21 years since an international group of scientists published the first analysis of the human genome sequence, Eric Topol, founder and director of Scripps Research Translational Institute, recently wrote. Illumina sees its new sequencing machine as a way to change that. Every meaningful price drop has rapidly led to an increase in the number of people whose genes have been analyzed, deSouza said. 
Illumina’s new NovaSeq X series comes in two models, with the base machine costing $985,000 and a more advanced one at $1.25 million. The new sequencers also come with new features like a simpler interface that could allow people without advanced degrees to use the machines, deSouza said. 
This is a crucial test for San Diego-based Illumina at a time of increased scrutiny from Wall Street. The company cut its full-year sales outlook last month, raising questions about demand. New competitors are cropping up and threatening Illumina’s dominance of the sequencing market. Moreover, the company’s years-long quest to acquire early-cancer detection company Grail is in limbo and facing regulatory challenges in Europe. Shares of Illumina have lost nearly half their value this year. 
It could take time for customers to upgrade their machines and even then, the introduction will likely be gradual since researchers will want to first familiarize themselves with the new system, deSouza said in a briefing with reporters at the event on Thursday. Existing customers may stick with their current sequencers for ongoing projects and use the new model for future endeavors, said Illumina’s Chief Commercial Officer Susan Tousi.
The company is hosting a splashy conference in its hometown this week as part of the unveiling. Speakers include former President Barack Obama, billionaire philanthropist Bill Gates and some of the top scientists in the genomics field. 
Investors are closely following the event for signs Illumina can change its story. Customers, mostly drug companies and research institutions, will be paying attention to price. Before the launch, nearly three dozen sequencing customers had estimated Illumina would set its prices at $280 per genome, according to a survey from Cowen analysts.
The price “will suffice,” though it’s “probably not the magnitude” some had expected after Ultima announced its price earlier this year, Piper Sandler analyst David Westenberg wrote Thursday in a note to clients. The new series will probably appeal more to academic researchers than clinicians, though that could still create double-digit sales and earnings growth for Illumina next year, estimates Westenberg, who has an overweight rating on Illumina.
Nearly every component is more user friendly, Evercore ISI analyst Vijay Kumar wrote Thursday in a note to clients. The key metric to watch will be initial customer reaction and whether the new system leads to larger studies and expands the market, wrote Kumar, who has an outperform rating on Illumina’s stock.
The new machines could have real financial implications for researchers who sequence large numbers of people, said Aris Baras, who leads Regeneron Pharmaceuticals Inc.’s Genetics Center. Regeneron scours genetic data to discover new drug targets. Baras praised Illumina for continuously decreasing the price of sequencing, allowing Regeneron to screen about 2 million people. 
“It’s a testament to Illumina’s innovation — pushing down costs and increasing output — especially when they haven’t historically had too many competitors being able to match them,” Baras said. Still, the price isn’t low enough for Regeneron to switch to exclusively whole genome sequencing. The drugmaker mostly scans only genes of key interest, which costs between one-fifth and one-tenth the price of reading all of a person’s genetic material. 
Newcomers are also trying to produce less expensive tests. Closely held upstart Ultima Genomics Inc. earlier this year said its machine could sequence a genome for just $100, putting pressure on Illumina. DeSouza played down the threat, saying the space has always been competitive and Illumina’s new line has been in the works for at least five years. Reaching the coveted $100 genome will take more steps, he said, but these technological advances put Illumina “much closer” to that goal.
Illumina has already started previewing the new machines with some customers, including Regeneron. Illumina will start shipping the first orders early next year. 
(Added share price change in sixth paragraph, added analyst reactions, and added chief commercial officer comment)
©2022 Bloomberg L.P.
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