Illumina, Inc. ( ILMN Quick Quote ILMN - Free Report) recently announced its entry into a partnership with renowned population genomics company, Helix, to enhance national surveillance infrastructure in the United States to track the emergence and prevalence of novel strains of SARS-CoV-2 UK Variant (B.1.1.7). Notably, this surveillance infrastructure will be developed with support from the Centers for Disease Control and Prevention (“CDC”).
Per Illumina, 51 out of the first 54 cases of B.1.1.7, the highly transmissible variant first found in the United Kingdom and reported in the United States, have already been identified via the collaboration.
The partnership is expected to combine Illumina’s sequencing technology and expertise with Helix’s national COVID-19 testing footprint. This, in turn, is likely to significantly expand the country’s existing surveillance efforts to detect and characterize emerging variants of SARS-CoV-2.
With the latest collaboration, Illumina aims to strengthen its Clinical Genomics business worldwide.
Rationale Behind the Collaboration
Illumina’s management believes that genomic surveillance is crucial in the fight against the pandemic. The company is partnering with Helix and CDC to provide accurate sequencing. Further, per the company, such accurate sequencing can contribute to rapidly scaling genomic surveillance in the United States to better understand the presence of B.1.1.7 and other variants as they gradually emerge.
Per a medical personnel associated with this field, a strong surveillance effort is required to understand how the SARS-CoV-2 virus evolves and how the public health response needs to adapt to tackle the same. Hence, this collaboration is likely to strengthen the surveillance effort to combat the latest highly transmissible variant of SARS-CoV-2, B.1.1.7.
Industry Prospects Per a report by Fior Markets published on GlobeNewswire, the global genomics market is expected to reach from $17.67 billion in 2018 to $48.11 billion by 2026 at a CAGR of approximately 13.3%. Factors like growing institutional support for the genomic research projects, significant decrease in sequencing costs and increasing applications of genomics are likely to drive the market.
Given the market potential, the collaboration seems to have been timed well.
Of late, Illumina has been witnessing a slew of developments across its business.
The company, in December 2020, announced a risk-sharing agreement with Harvard Pilgrim Health Care to make whole-genome sequencing (“WGS”) available to eligible Harvard Pilgrim members. Notably, this program will be effective from Jan 1, 2021 and will leverage WGS to enable faster diagnosis of genetic diseases in children.
Illumina, in November, announced the commercial availability of the P3 high-output flow cell, thus expanding the reach of the NextSeq 2000 Sequencing System.
Illumina, during its third-quarter earnings call in October, confirmed that Australia has recently announced the reimbursement of whole-exome or genome sequencing to identify the genetic cause of intellectual disabilities.
In September, the company entered into a definitive agreement with a healthcare company — GRAIL — to help transform cancer care using genomics and the Next-generation sequencing platform. The same month, Illumina announced that the Australian public health laboratories will aim to sequence the virus genomes of all positive COVID-19 tests in Australia. This will track COVID-19-using genomics across the country, rather than state by state, under a ground-breaking initiative spearheaded by Australia’s public health laboratory organizations and leading industry partners.
Shares of the company have gained 17.5% in the past year compared with the
industry’s 9.2% rise and S&P 500’s 18.3% growth. Zacks Rank & Stocks to Consider
Currently, Illumina carries a Zacks Rank #4 (Sell).
Some better-ranked stocks from the broader medical space are
Hologic, Inc. ( HOLX Quick Quote HOLX - Free Report) , IDEXX Laboratories, Inc. ( IDXX Quick Quote IDXX - Free Report) and Patterson Companies, Inc. ( PDCO Quick Quote PDCO - Free Report) .
Hologic’s long-term earnings growth rate is estimated at 17.4%. The company presently carries a Zacks Rank #1 (Strong Buy). You can see
the complete list of today’s Zacks #1 Rank stocks here.
IDEXX’s long-term earnings growth rate is estimated at 15.8%. It currently carries a Zacks Rank #2 (Buy).
Patterson’s long-term earnings growth rate is estimated at 11.1%. The company presently carries a Zacks Rank #2.
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