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Interview Synopsis

Illumina sequencing update – long-term diversification outlook

  • Public Equity
  • Healthcare
  • North America

Illumina is still “in a great spot” despite issues surrounding its proposed merger with Grail, a former product manager at Illumina told Third Bridge Forum.

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Illumina still on top but competition in sequencing industry intensifies

In the Interview, the specialist discussed a range of topics related to sequencing industries, including the key players, Illumina’s own expansion into clinical proteomics, as well as the company’s near-term outlook.

Illumina expected the EU to veto its proposed merger with Grail, the specialist said. The veto highlighted the “institutional resistance” to the merger, and the latest setback meant Illumina was now “0-2” with governments, having had its merger with PacBio blocked by the UK in 2020. As a result of this latest complication, the company might look to acquire a protein company, and it could also delay any potential product launch of Grail products in Europe “for years”, the specialist said. 

Though a disappointing setback, the specialist praised Illumina’s “outstanding” performance in 2021. The company had “come out of COVID strong”, with “explosive growth” across a number of key segments including clinical diagnostics, liquid biopsy and testing oncology panels.

The specialist said that the pandemic had had a positive effect on life sciences in general, and that there was now a “flood of cash out there for new companies, for new projects, for new research cycles” – all of which will benefit Illumina in the near term.

Although Illumina still leads in the sequencing industry, competition is growing. BGI is a “big threat” to the company, the specialist said, having undercut Illumina on price and becoming “more aggressive” in recent years. The specialist said single-cell or other RUO applications are specific areas where it can challenge Illumina in the short term.

PacBio is also challenging Illumina, having secured significant investment from a number of investors including Softbank. The company is actively building its portfolio with the recent acquisition of Omniome, and the specialist said it is “making the right moves” as it looks to compete with Illumina.

Oxford Nanopore is another company “making waves” with its protein sequencing. Proteomics could be the next genomics, the specialist said, worth a possible market value of USD 400bn over the next 10-years. Acquiring a company involved in proteomics is something Illumina is looking at, the specialist said, with SomaLogic and Encodia mentioned as possibilities.

Despite growing competition, the specialist was bullish that Illumina could keep its number one status over the near term, saying “I think the company has gone through some pretty dramatic changes over the last year, but I think that engine still is largely in place and I have every confidence that they will deliver.”

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