The oncology market
Illumina (ILMN) is currently targeting opportunities worth $12 billion in the oncology testing space. This market can be broken down into research, translational, and clinical segments.
The oncology market’s large and growing research segment has received increased funding from the pharmaceutical and biotechnology industry. Oncology research is using NGS (next-generation sequencing) technology to develop new drugs targeting various types of cancer.
In translational research, Illumina aggregates and analyzes large quantities of genomic data using NextBio, a platform acquired by Illumina in 2013. This research is then used to optimize oncology therapies and identify disease trends in populations.
Illumina has partnered with companies such as Sanofi (SNY), AstraZeneca (AZN), and Johnson & Johnson (JNJ) to develop NGS-based oncology testing systems. These systems will be used to conduct clinical trials of targeted cancer therapies being developed by biotechnology firms.
According to the National Cancer Institute, “targeted cancer therapies are drugs or other substances that block the growth and spread of cancer by interfering with specific molecules (‘molecular targets’) that are involved in the growth, progression, and spread of cancer. Targeted cancer therapies are sometimes called ‘molecularly targeted drugs,’ ‘molecularly targeted therapies,’ ‘precision medicines,’ or similar names.” Targeted cancer therapies are preferred because they do not affect normal body cells, unlike chemotherapy. To know more about oncology and chemotherapy, please refer to Key Therapies for Cancer Will Determine Biotechnology’s Profits.
Illumina’s oncology products
Illumina created a group called the AGC (Actionable Genome Consortium), which involves several leading cancer centers and thought leaders. The AGC is responsible for publishing the NGS standards for multi-gene panels for cancer.
Multi-gene panels are groups of genes responsible for a particular cancer. Actionable genes are those genes where undesirable mutations can be treated or avoided to cure cancer. Illumina has developed a multi-gene panel that can analyze 15 actionable cancer-related genes. Although the panel was initially for research only, the company expects to get it approved by the FDA (Food and Drug Administration) as an IVD (in vitro diagnostic) product that could be sold as a laboratory kit.
The second version of this multi-gene panel will be more comprehensive and will be able to analyze 170 actionable genes. Illumina’s cancer diagnosis kit would check for any unwanted mutations in the first 15 actionable genes in the cancer patient. In cases where the patient doesn’t show any mutations in the first panel, then the 170-gene panel would be used for analysis. This will help pharmaceutical companies to provide cancer patients with more targeted therapies.
Investors can get exposure to Illumina’s $12 billion oncology opportunity yet control unique risks by investing in the the iShares Nasdaq Biotechnology ETF (IBB). Illumina accounts for 4.09% of its total holdings.