Illumina, Inc. ILMN, a global provider of next-generation sequencing (NGS) technology, recently unveiled the NovaSeq Series, a scalable sequencing solution expected to enable a $100 genome. This set of research platform redefines high throughput sequencing, easy use, low per sample costs and superior flexibility. The NovaSeq Series includes the NovaSeq 5000 and 6000 systems which will be shipped in Mar 2017 and mid-2017, respectively.
In the majority of the last six months, Illumina has outperformed the Zacks classified Medical - Biomedical and Genetics industry. The stock has generated a marginal return of 1.4% over this period, which is better compared to the broader industry’s decline of 2.8%. However, the company saw sluggish growth in this timeframe primarily because of the cut in National Institutes of Health’s (NIH) funding in medical innovation.
On a positive note, Illumina continues to grow on its portfolio expansion strategy. The portfolio represents a group of systems that are designed to meet the workflow, output, and accuracy demand of a full range of sequencing applications. We hope that the new series of NGS technology will contribute to the top line in the near term.
Management claims that NovaSeq is the most powerful sequencer of the company and will open new horizons for more in-depth experiments for rare genetic variants. The new pair of instruments is easy to use similar to those in Illumina’s desktop sequencing portfolio. It is expected that the NovaSeq series would drive discoveries that will enable a deeper understanding and better treatment of complex diseases.
Illumina, Inc. Price
Illumina, Inc. Price | Illumina, Inc. Quote
Compared to the other Illumina sequencing systems, both the NovaSeq instruments have lower per sample consumable costs for most sequencing applications. They provide laboratories that cannot afford the capital cost of a HiSeq X Five or HiSeq X Ten System with a roadmap to completing human whole-genome sequencing projects at a cost of $1,000 per genome.
According to a MarketsandMarkets report, the global NGS market is poised to reach a worth of $10,371.1 million by 2021, at a CAGR of 20.8%. Illumina is therefore making diligent efforts to cash in on this growing market through pipeline product expansion and strategic collaborations. Last November, Illumina inked a deal with Mayo Clinic to make advancements in NGS technology. The companies also launched another NGS solution-TruSight Tumor 170 to support the transformation of the tumor-profiling paradigm from a series of single-gene tests to a multi-analyte approach, providing a clear picture of a tumor’s genomic landscape.
Zacks Rank & Key Picks
Illumina carries a Zacks Rank #3 (Hold). Better-ranked medical stocks are ICU Medical Inc. ICUI, Align Technology, Inc. ALGN and NanoString Technologies, Inc. NSTG. ICU Medical sports a Zacks Rank #1 (Strong Buy) while NanoString Technologies and Align Technology carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
ICU Medical gained 36.5% over the last one year compared to the S&P 500’s 17.9%. The company has an impressive long-term earnings growth of 20.5% for the next five years compared to the industry average of 15.2%.
NanoString Technologies surged 81.6% over the past one year, better than the S&P 500. It has a trailing four-quarter average positive earnings surprise of 6.9%.
Align Technology rallied 55.4% in the past one year, way better than the S&P 500. It has a trailing four-quarter average positive earnings surprise of 23%.
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