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Illumina’s (ILMN - Free Report) market opportunities continue to expand, driven by accelerated demand from clinical and larger customer transition to NovaSeq X. Yet, regulatory issues surrounding GRAIL dent growth. The stock carries a Zacks Rank #3 (Hold).
Illumina is currently keeping up well with its goals to strengthen its foothold in the multi-billion gene sequencing worldwide market with some highly competitive products in its existing portfolio and pipeline. Further, the company is developing sample-to-answer solutions to catalyze adoption in the clinical setting, including in reproductive and genetic health and oncology.
In reproductive health, the company primarily focuses on driving noninvasive prenatal testing (NIPT) adoption globally through technology, which identifies fetal chromosomal abnormalities by analyzing cell-free DNA in maternal blood. The market adoption of the NGS technology is also accelerating the research for rare and undiagnosed diseases to discover the genetic causes of inherited disorders by assessing many genes simultaneously.
In the United States, Louisiana, Michigan, North Carolina, Rhode Island and Tennessee updated their state Medicaid coverage for NIPT in all pregnancies. Across Europe, NIPT is currently available for all pregnancies in the Netherlands and has been approved for broader coverage in Italy. This year, the company also announced a partnership with Henry Ford Health, to assess the impact of comprehensive genomic testing in cardiovascular disease, particularly in diverse and underserved populations.
In the third quarter of 2023, clinical sequencing consumables grew 10% year over year, led by continued momentum in oncology and genetic disease testing. Illumina opened a new office and state-of-the-art Solutions Center in Bengaluru, India, to grow the genomics market in the most populous country in the world, unlocking opportunities for advancing health care and combating the effects of climate change in South Asia.
The NovaSeq X launch has further strengthened Illumina's competitive position in high-throughput sequencing. The sophisticated platform includes the most comprehensive end-to-end software the company has released to date. The strong global interest in the NovaSeq X series has led to its rollout occurring at a strong magnitude and pace.
During the third quarter, Illumina saw encouraging trends across both its research and clinical high-throughput customers who have a NovaSeq X installed. On both quarter-over-quarter and year-over-year basis, these customers have shown higher overall growth in sequencing output than high-throughput customers who are yet to adopt NovaSeq X. The company exited the quarter with more than 310 orders since launch, with the total installed base being 273 instruments.
On the flip side, Illumina’s acquisition of GRAIL remains subject to ongoing legal and regulatory proceedings in the United States and the European Union.
As of Oct 1, 2023, Illumina’s accrued liabilities included $458 million and also comprised related foreign currency gains. In addition, the company also remains at risk of further fines, penalties, remedies or restrictions from the European Commission, the FTC and/or other governmental or regulatory authorities.
Currently, GRAIL is held and operated separately and independently from Illumina pursuant to the transitional measures ordered by the European Commission in the EC Divestment Decision, which prohibited the company’s acquisition of GRAIL under the EU Merger Regulation. Other than the uncertainty surrounding GRAIL integration, these regulatory complications are raising the legal expenses for Illumina, thereby building pressure on the bottom line.
Further, the current macroeconomic scenario, including the armed conflict between Russia and Ukraine, which began in 2022, and the sanctions imposed by the United States and other countries have impacted the company’s ability to ship products to affected regions and customers. Furthermore, the slowdown of COVID-19 surveillance and macroeconomic factors, such as inflation, exchange rates and competitive challenges in China, have impacted both Illumina’s business performance and customers’ behavior. In the near term, management does not expect these headwinds to lessen.
In the third quarter, total sequencing consumable revenues were also impacted by COVID-19, Russia and China factors, as well as macroeconomic conditions on customers' purchasing power and project planning. On a combined basis, the decrease in COVID-19 surveillance and the effect of sanctions in Russia represented approximately a 3.5%-point reduction in Core Illumina revenues.
Over the past years, shares of ILMN have plunged 45.8% compared with the industry’s 23% decline.
Estimates for Insulet’s 2023 earnings per share have increased from $1.61 to $1.90 in the past 30 days. Shares of the company have decreased 40.9% in the past year compared with the industry’s decline of 7%.
PODD’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 105.1%. In the last reported quarter, it delivered an average earnings surprise of 77.4%.
Haemonetics’ stock has risen 11.6% in the past year. Earnings estimates for Haemonetics have increased from $3.82 to $3.86 for 2023 and from $4.07 to $4.11 for 2024 in the past 30 days.
HAE’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 16.1%. In the last reported quarter, it delivered an earnings surprise of 5.3%.
Estimates for DexCom’s 2023 earnings per share have increased from $1.23 to $1.41 in the past 30 days. Shares of the company have fallen 7.8% in the past year compared with the industry’s decline of 7.1%.
DXCM’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 36.4%. In the last reported quarter, it delivered an average earnings surprise of 47.1%.
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Illumina (ILMN) Expands Globally Despite Macroeconomic Woes
Illumina’s (ILMN - Free Report) market opportunities continue to expand, driven by accelerated demand from clinical and larger customer transition to NovaSeq X. Yet, regulatory issues surrounding GRAIL dent growth. The stock carries a Zacks Rank #3 (Hold).
Illumina is currently keeping up well with its goals to strengthen its foothold in the multi-billion gene sequencing worldwide market with some highly competitive products in its existing portfolio and pipeline. Further, the company is developing sample-to-answer solutions to catalyze adoption in the clinical setting, including in reproductive and genetic health and oncology.
In reproductive health, the company primarily focuses on driving noninvasive prenatal testing (NIPT) adoption globally through technology, which identifies fetal chromosomal abnormalities by analyzing cell-free DNA in maternal blood. The market adoption of the NGS technology is also accelerating the research for rare and undiagnosed diseases to discover the genetic causes of inherited disorders by assessing many genes simultaneously.
In the United States, Louisiana, Michigan, North Carolina, Rhode Island and Tennessee updated their state Medicaid coverage for NIPT in all pregnancies. Across Europe, NIPT is currently available for all pregnancies in the Netherlands and has been approved for broader coverage in Italy. This year, the company also announced a partnership with Henry Ford Health, to assess the impact of comprehensive genomic testing in cardiovascular disease, particularly in diverse and underserved populations.
Illumina, Inc. Price
Illumina, Inc. price | Illumina, Inc. Quote
In the third quarter of 2023, clinical sequencing consumables grew 10% year over year, led by continued momentum in oncology and genetic disease testing. Illumina opened a new office and state-of-the-art Solutions Center in Bengaluru, India, to grow the genomics market in the most populous country in the world, unlocking opportunities for advancing health care and combating the effects of climate change in South Asia.
The NovaSeq X launch has further strengthened Illumina's competitive position in high-throughput sequencing. The sophisticated platform includes the most comprehensive end-to-end software the company has released to date. The strong global interest in the NovaSeq X series has led to its rollout occurring at a strong magnitude and pace.
During the third quarter, Illumina saw encouraging trends across both its research and clinical high-throughput customers who have a NovaSeq X installed. On both quarter-over-quarter and year-over-year basis, these customers have shown higher overall growth in sequencing output than high-throughput customers who are yet to adopt NovaSeq X. The company exited the quarter with more than 310 orders since launch, with the total installed base being 273 instruments.
On the flip side, Illumina’s acquisition of GRAIL remains subject to ongoing legal and regulatory proceedings in the United States and the European Union.
As of Oct 1, 2023, Illumina’s accrued liabilities included $458 million and also comprised related foreign currency gains. In addition, the company also remains at risk of further fines, penalties, remedies or restrictions from the European Commission, the FTC and/or other governmental or regulatory authorities.
Currently, GRAIL is held and operated separately and independently from Illumina pursuant to the transitional measures ordered by the European Commission in the EC Divestment Decision, which prohibited the company’s acquisition of GRAIL under the EU Merger Regulation. Other than the uncertainty surrounding GRAIL integration, these regulatory complications are raising the legal expenses for Illumina, thereby building pressure on the bottom line.
Further, the current macroeconomic scenario, including the armed conflict between Russia and Ukraine, which began in 2022, and the sanctions imposed by the United States and other countries have impacted the company’s ability to ship products to affected regions and customers. Furthermore, the slowdown of COVID-19 surveillance and macroeconomic factors, such as inflation, exchange rates and competitive challenges in China, have impacted both Illumina’s business performance and customers’ behavior. In the near term, management does not expect these headwinds to lessen.
In the third quarter, total sequencing consumable revenues were also impacted by COVID-19, Russia and China factors, as well as macroeconomic conditions on customers' purchasing power and project planning. On a combined basis, the decrease in COVID-19 surveillance and the effect of sanctions in Russia represented approximately a 3.5%-point reduction in Core Illumina revenues.
Over the past years, shares of ILMN have plunged 45.8% compared with the industry’s 23% decline.
Key Picks
Some better-ranked stocks in the broader medical space are Insulet (PODD - Free Report) , Haemonetics (HAE - Free Report) and DexCom (DXCM - Free Report) . While Insulet presently sports a Zacks Rank #1 (Strong Buy), Haemonetics and DexCom each carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Estimates for Insulet’s 2023 earnings per share have increased from $1.61 to $1.90 in the past 30 days. Shares of the company have decreased 40.9% in the past year compared with the industry’s decline of 7%.
PODD’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 105.1%. In the last reported quarter, it delivered an average earnings surprise of 77.4%.
Haemonetics’ stock has risen 11.6% in the past year. Earnings estimates for Haemonetics have increased from $3.82 to $3.86 for 2023 and from $4.07 to $4.11 for 2024 in the past 30 days.
HAE’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 16.1%. In the last reported quarter, it delivered an earnings surprise of 5.3%.
Estimates for DexCom’s 2023 earnings per share have increased from $1.23 to $1.41 in the past 30 days. Shares of the company have fallen 7.8% in the past year compared with the industry’s decline of 7.1%.
DXCM’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 36.4%. In the last reported quarter, it delivered an average earnings surprise of 47.1%.