Life Tech for Faster Sequencers - Analyst Blog

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The DNA sequencing market is likely to get more competitive with both Life Technologies Corporation ( LIFE ) and Illumina ( ILMN ) showcasing devices that can sequence a human genome in a single day rather than weeks.

Calsbad, California based Life Technologies unveiled the Benchtop Ion Proton Sequencer, priced at $149,000, at the Consumer Electronics Show in Las Vegas. The company is already taking orders for the same, which is expected to hit the market in mid-2012. Based on the next generation semiconductor technology the device will be able to sequence the entire human genome in one day for $1,000. Illumina, based in San Diego, is looking at launching its HiSeq 2500 in the second half of 2012. The company, however, did not reveal the price of the device.

Genome sequencing currently in vogue uses optical based technologies that may take weeks to deliver results and is also dearer at $5,000−$10,000. In addition, the high cost of the instrument ($500,000−$750,000) has been a deterrent to its expansion in research labs.

The significance of this advanced technology can be gauged by the fact that three major research institutions have already signed up for multiple Ion Proton Sequencers - the Baylor College of Medicine, the Yale School of Medicine and the Broad Institute.

The first sequencing of the human genome was announced more than a decade ago in the White House in June 2000. Since then the focus has been on reducing the cost of sequencing a gene so that it can benefit the patient community at large. Dr. Richard Gibbs, Director of the Human Genome Sequencing Center, Baylor College of Medicine, is impressed with the recent development and is confident that the new-age technology will transform the clinical applications of sequencing.

Over the past few quarters, Life Technologies has been working to expand its Ion franchise. In October 2011, the company launched Ion AmpliSeq Cancer Panel to help scientists to sequence dozens of genes in cancer research samples using a simple workflow. In addition to confirmation of mutations within one day, the system also makes DNA extraction possible from fixed, frozen or fresh tissue. The Cancer Panel sequences 46 cancer-related genes for over 700 known cancer mutations.  

Life Technologies enjoys a strong position in the life sciences market.Challenges, nevertheless, remain in the form of tighter budgets for academic and government funded research in both the US and Europe, a trend that is expected to continue. The stock retains a Zacks #4 Rank (Sell) in the short term.

Although the company does not expect the scenario to worsen in the near future, it is repositioning itself for a slower growth environment by lowering its cost structure and focusing on R&D initiatives. Over the long term, we maintain our Neutral recommendation on Life Technologies.


 
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



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Referenced Stocks: ILMN , LIFE

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