Illumina Unveils $100 Genome Ambition with NovaSeq Launch and Strategic Alliances with IBM and Philips

1Month9DayJ.PAt the Morgan Health Conference, Global Genetic Testing GiantIlluminaAnnounces the Launch ofNovaSeqSeries of sequencers, with their unmatched throughput, streamlined operation, low cost, and flexibility, are expected to reduce the cost of gene sequencing to100U.S. dollars. This heralds the imminent arrival of the era of hundred-dollar genomics!

On January 9, at the J.P. Morgan Healthcare Conference, Illumina and Bio-Rad, a leading global provider of life science research and clinical diagnostic solutions, announced the launch of a single-cell genomic sequencing solution to enhance research on complex diseases.

On January 9, Illumina and Royal Philips, a global leader in health technology, announced a strategic partnership to jointly provide comprehensive oncology genomics solutions.

On January 9, Illumina and IBM Watson Health officially formed a strategic alliance dedicated to standardizing the interpretation of genomic data. The partnership aims to help patients without available targeted therapies identify potential treatment options through the TruSight Tumor 170 assay.

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The J.P. Morgan Healthcare Conference is in full swing, with Illumina dominating the headlines. A barrage of major announcements has left journalists struggling to keep up. In fact, Illumina’s media dominance began well before the conference even started.

On January 5, Illumina announced that its oncology liquid biopsy subsidiary, Grail, had initiated a Series B financing round with a target of up to $1 billion. Furthermore, the proceeds from this round will be used to repurchase the shares held by Illumina. Illumina also intends to spin off Grail as soon as possible, transforming it from a subsidiary into its largest customer.

On January 4, Illumina, together with five leading U.S. genetic testing companies—Counsyl, Natera, Progenity, and Laboratory Corporation of America’s specialty lab Integrated Genetics—jointly announced the establishment of a Prenatal Screening Alliance. The alliance will work collaboratively to enhance non-invasive prenatal screening through cfDNA-based non-invasive prenatal testing.

One blockbuster announcement after another shows no sign of stopping. Although nearly overwhelmed by the barrage of news, reporters identified a common thread: Illumina appears to be deliberately strengthening its footprint in the clinical consumer market. To this end, we have analyzed Illumina’s recent moves.

Let’s begin with the major milestone marking the advent of the $100 genome era. The launch of the NovaSeq series of sequencers came as no surprise to this reporter, as Illumina has long been committed to making gene sequencing accessible to households everywhere. Previously, Illumina played a pivotal role in reducing the cost of whole-human-genome sequencing from $100 million to $1,000, with its HiSeq X systems and the “$1,000 genome” becoming virtually synonymous with the company. Nature magazine praised Illumina highly, stating, “What they have achieved has surpassed Moore’s Law, delivering highly accurate predictions of irregular variants.”

For a time, the upstream sequencing instrument market was nearly monopolized by Illumina, while the gene sequencing market experienced a significant boom. However, Illumina did not intend to rest on its laurels with the "$1,000 genome." As early as when its subsidiary Grail was established, Illumina had announced plans to drive sequencing costs below $1,000 by 2019.

But is it really as the outside world claims,Has the NovaSeq series already reduced sequencing costs to $100? Not quite. According to Song Zhuo, CTO of Renhe Future, Illumina CEOFrancis deSouza stated in an interview with BioIT World that the per-GB sequencing cost of NovaSeq is 20% lower than that of HiSeq X.Therefore, the true cost of whole-genome sequencing for humans using the NovaSeq series will be $800. Song Zhuo stated that the goal of $100 genome sequencing can only be achieved by increasing read length and read density while reducing flow cell costs, which is expected to take at least another three years.

The NovaSeq series also achieves a breakthrough in sequencing speed. While whole-genome sequencing on the HiSeq X takes 72 hours, the NovaSeq series reduces this time to 40 hours. Under current data analysis protocols, even with a million-dollar computing cluster, data analysis requires three days, with actual turnaround times potentially extending to five or six days; thus, the 32-hour savings may appear insignificant. However, Song Zhuo explained to the reporter, “If a groundbreaking computational approach is adopted to reduce computation time to just over ten minutes, the significance of these 32 saved hours becomes extremely evident.”

Although the $100 genome has not been truly realized, the launch of the NovaSeq system at least marks the advent of the era of hundred-dollar-level gene sequencing.Illumina has truly done an excellent job!Undoubtedly, the gene sequencing market, particularly the clinical segment, is poised for a second wave of expansion; Illumina has also officially stated that it will prioritize the development of clinical research.

The NovaSeq series is the most powerful sequencing platform launched by Illumina to date. The NovaSeq series not only meets researchers’ demands for next-generation sequencing technologies but also significantly reduces the complexity of sequencing. It can perform whole-genome sequencing for 3–28 individuals in a single run, and opens up new market opportunities in areas such as ultra-deep sequencing for tumor–normal tissue comparisons and large-scale genetic variant analysis associated with complex diseases.

The NovaSeq system comprises two models, the NovaSeq 5000 and the NovaSeq 6000, priced at $850,000 and $985,000, respectively. The NovaSeq 6000 is scheduled to begin global shipments in March 2017, while the NovaSeq 5000 is expected to ship in mid-2017. It is reported that Hybribio, a Chinese genetic testing company, has ordered 10 NovaSeq 6000 sequencers, becoming the first company in China to adopt the NovaSeq system.

Illumina’s efforts to reduce sequencing costs are aimed at strengthening the development of genomic sequencing in the clinical sector. The astute company fully recognizes the substantial scale of the clinical market and understands that clinical applications will be a key area for the implementation of genomic sequencing.

From the partnerships already announced this year, it is evident that Illumina aims to further consolidate its position in the clinical midstream sequencing market through strategic collaborations.

Illumina officially entered the midstream sequencing services market in 2007 by acquiring the gene sequencing company Solexa for $600 million. This move broke Illumina’s previous stance of not competing with its customers. Subsequently, the company embarked on an aggressive acquisition spree, buying up one competitor after another. In January 2013, Illumina acquired Verinata Health for $350 million. The announcement sent shockwaves through the industry, as Verinata was a direct competitor of Illumina in the field of non-invasive prenatal testing (NIPT). This marked Illumina’s formal entry into the NIPT market.

Subsequently, the company released a series of guidelines from ACOG, ACMG, ISPD, and the Society for Maternal-Fetal Medicine, and actively collaborated with insurance companies, gradually emerging as a leader in the field of non-invasive prenatal testing.

A few days ago, Illumina joined forces with leading genetic testing companies such as Natera to establish the Prenatal Screening Alliance. The alliance is committed to promoting the adoption of non-invasive prenatal screening in the clinical market, raising public awareness of the value of cfDNA-based NIPT, and delivering services of the highest standards and quality. While these companies are individually competitive, collaborating to expand the market aligns better with their interests than competing for share within a limited landscape.

Beyond the field of non-invasive prenatal testing, Illumina has also made significant strides in tumor sequencing. Of the four announcements made at the Morgan Stanley Conference, two pertained to its strategic initiatives in tumor sequencing.

In 2013, the company launched the TruSight series of sequencing kits for oncology: TruSight Tumor and TruSight Cancer. The former provides deeper insights into alterations in solid tumors by covering all exons of tumor suppressor genes, facilitating a more comprehensive assessment of somatic variants in solid tumors such as lung, colorectal, melanoma, gastric, and ovarian cancers. The latter targets genes previously associated with cancer susceptibility, focusing on more than 90 genes known to play a role in cancer, including those linked to both common (e.g., breast cancer and colorectal cancer) and rare cancers.

In this alliance with IBM Watson, the TruSight Tumor 170 from the TruSight Tumo series will play a significant role. The two companies will establish the IBM Watson Genomics Initiative, leveraging Illumina’s TruSight Tumor 170 to help cancer patients identify appropriate therapeutic drugs. The partnership aims to encourage the adoption of patient DNA sequencing by healthcare institutions beyond mainstream cancer research centers such as Memorial Sloan Kettering Cancer Center and M.D. Anderson Cancer Center. Through sequencing, there is hope to identify treatment options for patients who currently lack targeted therapy alternatives; however, this approach is currently applicable only to non-small cell lung cancer.

For hospitals and physicians, two key challenges arise: which genes to sequence and how to analyze the resulting data. IBM-Illumina offers an ideal solution: sequencing is limited to a panel of 170 cancer-related genes, encompassing all therapeutic targets that are either approved or currently under clinical investigation. Upon receiving the data, IBM Watson performs rapid analysis and informs hospitals and patients about the types of genetic mutations identified as well as recommended therapeutic agents.

Steve Harvey, Vice President of Watson Health, stated that the alliance aims to enable general hospitals to perform DNA sequencing, which could potentially benefit 20,000 Americans.

Illumina’s strategic partnership with Philips also targets oncology genomics. The two companies will join forces to provide comprehensive oncology genomics solutions, aiming to integrate Illumina’s sequencing systems for large-scale genetic variant analysis and functionality with Philips’ IntelliSpace Genomics clinical information platform, while coordinating go-to-market strategies and sales efforts. Furthermore, Philips and Illumina will seek collaboration in clinical research and precision oncology initiatives.

However, the truly significant move was actually the subsidiary Grail. At last year’s J.P. Morgan Healthcare Conference, Illumina announced the joint establishment of Grail, a subsidiary focused on liquid biopsy for cancer detection, in partnership with ARCH Venture Partners (it seems Illumina has a penchant for making headlines at the J.P. Morgan conference). Although Grail may soon part ways with Illumina to operate independently, Illumina will still retain approximately 20% equity stake in Grail. The two entities will evolve into strategic partners, with Grail becoming Illumina’s largest customer.

Not only has the company made precise strategic layouts in the upstream and midstream sectors, but it is also actively expanding its downstream market partnership channels.

Another announcement made by Illumina at the Morgan Stanley conference was its partnership with Bio-Rad. Bio-Rad is one of the few high-tech multinational corporations in the fields of clinical diagnostics and life sciences. This collaboration will launch single-cell genomic sequencing solutions to enhance research on complex diseases. Reportedly, this is the first next-generation sequencing solution designed for single-cell analysis, which will help researchers explore single-cell tissue function, disease progression, and treatment responses.

These are merely excerpts, and they almost exclusively pertain to strategic actions from 2017!"Reviewing the company's strategic layout since its establishment in 1998 would likely amount to an epic masterpiece."

Targeting the largest clinical-end market while strategically positioning itself across the upstream, midstream, and downstream segments, Illumina truly stands out as the smartest company. This savvy corporation not only builds its commercial empire but also actively engages in philanthropic initiatives, adding a charming touch to its corporate image.

Last December, Illumina quietly launched the iHope charitable program in partnership with the San Diego–based nonprofit California Children’s Foundation, the Maryland Institute for Rare Genomic Diseases, and San Francisco’s Benioff Children’s Hospital. The iHope program is dedicated to helping children with undiagnosed conditions whose families cannot afford sequencing-based diagnostic testing. Illumina plans to sequence 100 patients and their parents in 2017.

Illumina will provide free clinical whole-genome sequencing for selected individuals in its CLIA-certified and CAP-accredited laboratories, aiming to offer humanitarian assistance to patients while also enhancing its understanding of rare diseases as part of medical practice.

In 2016, the company's total sales amounted to $2.398 billion, representing an 8% year-on-year increase. Among this, Q4 sales reached $619 million, accounting for 25.81% of the full-year total and marking a 5% year-on-year growth.

Despite the retirement due to illness of Jay Flatley, the former CEO and key architect of the company’s success, Illumina has maintained its strong momentum under the leadership of current CEO Francis deSouza. As 2017 had just begun, the company had already announced six major strategic initiatives, signaling confidence that Illumina would continue to press forward with bold and decisive actions throughout the year.