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With an aim to expand in the field of genomic-based diagnostic tools, Illumina Inc. (ILMN - Analyst Report), a major developer of life science tools for large-scale genetic analysis, recently acquired UK based BlueGnome Ltd. However, financial terms of the deal were not disclosed.

BlueGnome is a provider of Cytogenetics and In Vitro Fertilization (IVF) screening solutions for genetic abnormalities associated with developmental delay, cancer and infertility. As a wholly owned subsidiary of Illumina, we expect it to support Illumina in the creation of integrated solutions in the field of reproductive health and cancer.

BlueGnome, one of the frontrunners in the field of IVF, has a comprehensive set of solutions for microarray and sequencing platforms for next generation products. The acquisition of BlueGnome will enable Illumina to access the company’s pre-implantation genetic screening (PGS) test 24sure, which it developed in collaboration with some of the world’s leading IVF centers. This test, by way of counting the chromosomes in a single human cell, improves upon the success rate of the IVF procedure, increasing pregnancy rates while reducing the possibilities of a miscarriage.

Further, BlueGnome’s CytoChip, an advanced test for the detection of genetic abnormalities in developmental delay or complex leukemias, is another major factor that encouraged Illumina to purchase the company. Currently, this cytogenetic test, already used by over 200 labs across 40 countries, is a famous assay worldwide. This test replaced the traditional G-band karyotyping.

Apart from its strong foothold in UK, BlueGnome has also established itself in Virginia and Singapore. Thus, this international presence is expected to add further synergies to Illumina's progress in this segment.

The ongoing difficulties in obtaining research funding in the backdrop of continuing economic uncertainty have not been enough to deter Illumina from working on several growth avenues to improve its performance going forward. Earlier this month, Illumina also entered into a strategic alliance with Partners HealthCare, a healthcare system developed by the Brigham and Women’s Hospital, and Massachusetts General Hospital in order to develop improved infrastructure and networking tools for the interpretation and reporting of genetic sequencing data.

The company also entered into a partnership with Siemens Healthcare Diagnostics to use the MiSeq platform for Siemens’ molecular HIV tests. Furthermore, the company expanded its Genome Network with the inclusion of the British Columbia Cancer Agency to its existing list. Illumina experiences tough competition from players like Life Technologies and Thermo Fisher Scientific (TMO - Analyst Report), among others.

Currently, Illumina retains a Zacks #2 Rank (short-term Buy). Over the long term, we have a ‘Neutral’ recommendation on the stock.

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