As a regular feature of our annual forecast issue, IBO selects a firm from our industry as the “company of the year.” In designating the company of the year, IBO recognizes an analytical and life science instrument maker that has accomplished technical, operational and financial achievements. Such achievements are a function of strong financial performance, market leadership, innovative product introductions and key strategic investments.

Given the difficulties the industry faced in 2009, the search for an outstanding candidate could have resulted in selecting a company with the least impacted business model. Fortunately, there was one company that not only survived 2009, but performed in a star-like fashion: the aptly named Illumina. Even in a normal year, Illumina would be a standout based on its strategic and financial performance, so excelling in a down year was quite an accomplishment.

Illumina was founded in 1998 and went public in 2000; thus, from a practical standpoint, it is a relatively new player to the industry. Nonetheless, it is already a leader in life science instrumentation, as well as a top 20 industry player (see IBO 4/15/09) and rapidly growing.

What is most remarkable about this story is the fact that Illumina has accomplished this in the face of entrenched competition and an overall maturation of the industry. Illumina achieved this distinction by introducing and aggressively marketing a steady stream of innovative high-performance and attractively priced products that has wowed the marketplace. The company has also made several key acquisitions during its short existence, including the purchase of Solexa, a developer of genome-sequencing technology, in November of 2006 (see IBO 11/15/06).

Illumina addresses a range of inter-related applications including SNP genotyping, gene expression profiling and proteomics based on its core technologies, which include the BeadArray and VeraCode microarray technologies, Genome Analyzer DNA sequencing technology, Oligator oligonucleotide synthesis technology, and assay technologies. It is the leader in the microarray market and is a strong second in DNA sequencing.

Illumina has likewise performed well financially, with 2009 revenues forecasted to grow to $662 million, up 15% from 2008 (see page 2). Profits are also likely to be up, even more so because of a more profitable business in 2009 and lower earnings in 2008 due to write-offs of in-process R&D charges related to previous acquisitions. The company’s stock has also garnered strong support based on an 18% increase in price in 2009 (see IBO 12/31/09), and an almost 60% jump recently due to enthusiasm for new product introductions, a good finish to 2009, and potential in the molecular diagnostic market.

So for 2009, it is fair to say that a star was born amidst a galaxy of uncertainty and a plethora of challenges. It is also very possible that Illumina will continue its ascendancy and be a shooting star in the years to come.

Chart: Illumina’s Current Addressable Market ($B)

Molecular Diagnostics $3.0

High to Low Complexity Arrays $1.5

Sequencing $1.1

Applied Markets $1.0