), a major developer of life science tools for large-scale
genetic analysis, recently entered into a 3-year supply agreement
with genetic testing company Natera. As per the terms, Natera's
noninvasive prenatal test (NIPT) Panorama will be performed using
Illumina's HiSeq 2500 and associated consumables. Financial terms
of the deal, however, are yet to be disclosed.
According to Illumina, this initiative remains a part of the
company's strategy to expand its footprint in the fast-growing
NIPT and the broader reproductive health market. Earlier this
year, as per the strategy, the company acquired Verinata Health,
Inc., a privately held company dedicated to non-invasive tests
for the early identification of fetal chromosomal
This acquisition gave the company access to Verinata's verifi
prenatal test, the largest among the non-invasive prenatal tests
(NIPT) available at present for high-risk pregnancies.
The NIPT market is estimated to be over $600 million in 2013,
with projected domestic market growth of 1.5 million to 2 million
tests per annum, in the next five years. With the occurrence of
500,000 high-risk pregnancies annually in the U.S., and an
estimated 4 million pregnancies in total, Illumina is hopeful
about its prospective growth in this niche market.
Difficulties in obtaining research funding amid continuing
economic uncertainty, have not been able to deter Illumina from
working on future growth avenues.The company continues to
demonstrate its strength in the genotyping market with its
high-margin next generation sequencing (NGS) platform. Over the
past few quarters, it has made several acquisitions and entered
into partnerships to tap the potential of this growing
We are also upbeat about the launch of the new reagent kits as
it is likely to bolster revenues from MiSeq systems for Illumina.
This should expand the installed base for the system and thereby
boost the sequencing consumables business for the company.
Illumina currently carries a Zacks Rank #3 (Hold). Other
stocks that warrant a look are
Gilead Sciences Inc.
). All these stocks carry a Zacks Rank #1 (Strong Buy).
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