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Illumina's Buzzing Genome Market

Mar. 03, 2021 3:06 PM ETIllumina, Inc. (ILMN)BIO, BNGO, GILD, NVS, TMO, TXG8 Comments
Bashar Issa profile picture
Bashar Issa


  • The growing market of gene therapies enhances Illumina's growth prospects.
  • Illumina has a strong balance sheet opening an opportunity to gain exposure to the rising market of personalized medicine without the risk of investing in biotech.
  • The acquisition of Grail capitalizes on the growing market of gene therapies.

Investment thesis

Personalized medicine is the future of healthcare. Illumina (NASDAQ:ILMN) is at the forefront of the market through state-of-the-art, industry-standard gene sequencing instruments.

The acquisition of Grail opens a significant growth opportunity in the cancer diagnostic business powered by the rising number of gene-based therapies.

Buzzing Market

The world is undergoing a cell revolution that would transform healthcare as we know it, and custom-made personalized medicines are the industry's future. In September 2017, the FDA approved Novartis' (NVS) Kymriah, the first gene-editing therapy in its history. It soon approved Gilead's (GILD) Yescarta, which utilizes the same mode of action. Currently, there are more than 300 gene-editing drugs in clinical trials. As the number of gene-based therapies increases, so will the need for gene-based diagnostic tools, such as Illumina's gene sequencers.

Illumina is the leading manufacturer of gene sequencers, the tools used to detect gene mutations in our bodies. This microscopy tool is powerful, allowing scientists to zoom in on single nucleotide variations that cause many diseases such as cancer and genetic blindness.

One factor that hindered gene-therapy growth is costs. Yescarta and Kymriah cost $373,000 and $475,000, respectively, excluding hospital stay costs and pre-therapy tests and examinations. This pushed some European governments with national health service systems to refuse to introduce these drugs into their systems. Many US insurers don't cover such therapies or have high premiums barring access for many.

A promising technology called CRISPR is carrying hopes of democratizing gene-therapy by making it more affordable and effective. The novel technology helped the two scientists behind it win the 2020 Nobel Prize in a quiet, COVID-compliant ceremony that politics overshadowed during the election season. Soon gene therapy will become a healthcare standard, and gene sequencing diagnostic a must-have tool in every physician's office.

A larger market for gene

This article was written by

Bashar Issa profile picture
Bashar is a contributing writer at Seeking Alpha, focusing on Long/Short investment ideas, with a geographic focus in North America. Before that, Bashar worked at an Investment Fund in the United Kingdom. He has a Master's degree in Finance from the Queen Mary University of London and a Bachelor's degree in Economics from Middlesex University.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (8)

This is a superb summary of this company and the macro issues in its market. I learned a lot. Thanks
European investor 99 profile picture
thanks agreed. One of my best investments so far along with bionano.
SuperPac profile picture
@European investor 99 I hope you are enjoying your ''best investment''. LOL. As the shyte hits the fan and beyond.
Appreciate the update on a stock that has gone far beyond my expectations when I bought it in 2014 ($162.00.) Wish I had bought more.

It can be volatile so appreciate the risk notations at the bottom. Will ride it upward. Made the mistake of selling Thermo-Fisher years ago, another really sharp company and nowcompetitor, and regret listening to the analysts who thought it was over-valued.
Good summary, but hoped I'd learn something new. My average cost is around $297.00. In this market we could briefly see the low $300's and I would likely buy more.
SuperPac profile picture
@Epicontact2 How does it feel being a bagholder?
@SuperPac Silly child. Well hedged investors are fine. We make money regardless of market movements with option income. I try to keep my comments relevant to typical retail investor. So my average cost here doesn't account for that income which obviously lowers my cost.
smartiny profile picture
No mention of Pacific Bioscience?
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