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Genomics Heats Up With LIFE Technologies Play

|Includes:ILMN, Thermo Fisher Scientific Inc. (TMO)

Future Clinical Potential of Genomics Attracts Financing and Deals

Life Technologies (LIFE $65) was up 3.6% again today on news that ThermoFisher (TMO $71.51) is studying a takeover. The market cap of LIFE is $10.7B while that of ThermoFisher is $25B. Private equity firms are also looking at LIFE which is up 34% YTD. ThermoFisher stock (NYSE:TMO)is on the Rayno Life Science focus list and is up 1.5% today. Illumina (ILMN $50.90) is up 1.4% off its December high of $57 when a Roche $6.7B bid was back in the news. ILMN is also on our focus list as a buy. Genomics and life science tools stocks like Illumina see their next opportunity in medical applications like sequencing. Also with potential cuts in the NIH budget major life science tools companies are looking for M&A opportunities in clinical diagnostics.

Recent financials of Illumina reported 2012 Revenues of $1.15B a 9% increase over 2011 and Net Income of $151M (41.13 EPS) compared to $87M ($0.62 EPS) in 2011.

Bruce Carlson of Kalorama Information in a recent GEN article estimates that the clinical market for sequencing could reach $1.8B by 2016. Low cost sequencing technologies are approaching $1000 per genome and will go lower. Personalized medicine for cancer treatment has been extensively published from genetic analysis of tumor samples through targeted therapy and breakthroughs are being announced monthly. There are already 15 approved drugs for 10 targets such as KRAS, BRAF, HER-2 etc and no Company would undertake a major drug development without a biomarker or companion Dx to track therapy.

We have written extensively on this topic so search the keywords and you will better understand the trends in genomics and personalized medicine.

Disclosure: I am long ILMN, RGDX.

Stocks: TMO, ILMN