Illumina’s Market Expansion Strategy for Genome Sequencing


Oct. 2 2015, Updated 3:07 p.m. ET

Illumina’s market expansion strategy

Illumina (ILMN) has a strong presence in the US genome sequencing market as well as in the growing European and Asian markets.

The above diagram shows the geographic distribution of Illumina’s revenues across its major markets. In 2014, the US, Europe and Asia Pacific markets accounted for about 51%, 25%, and 18% of the company’s total revenues, respectively.

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Developed markets

Illumina’s first population sequencing project was Genomics England, and the United Kingdom continues to be a major market for the company. Population genome sequencing involves large-scale DNA analysis of a particular population. There is a $130 million backlog associated with the Genomics England project, which is expected to be completed by end of 2017. The company plans to target the United States, Europe, and China for population sequencing projects.

The reproductive and genetic health segment is another important market for Illumina. The company launched a new product, VeriSeq NIPT (noninvasive prenatal testing), in Europe in the second quarter of 2015. Illumina aims to get the CE-IVD mark, a mandatory marking required for in vitro diagnostic products sold in the European Economic Area, in the first half of 2015. This marking will substantially increase customer confidence in Illumina’s VeriSeq and increase its use in laboratories for prenatal testing.

Also, both the United States and Europe are major markets for oncology diagnostics. Illumina has partnered with leading companies such as Sanofi (SNY), AstraZeneca (AZN), and Johnson & Johnson (JNJ) to develop NGS (next-generation sequencing) oncology testing systems.

Developing markets

Illumina’s newly launched multi-million genome sequencing product HiSeq X has managed to penetrate the Chinese market and has been well-received by customers. This success is attributed mainly to HiSeq X’s high throughput and low price.

With two million high-risk pregnancies annually, the Chinese reproductive market is expected to be three times larger than the US market. Also, Illumina has partnered with Berry Genomics and Annoroad Genomics to co-develop NGS systems for NIPT.

You can get exposure to Illumina’s market expansion strategy yet control unique risks by investing in the iShares Nasdaq Biotechnology ETF (IBB). Illumina accounts for 4.09% of its total holdings.


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