As a regular feature of our annual forecast issue, IBO selects a firm from our industry as “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.

Because 2013 was such a difficult year for the instrument industry, it might be assumed that a marginally better performing company would qualify. Fortunately, there is one company that not only did well in 2013 but performed in astronomical fashion, the aptly named Illumina. Even in a normal year, this company would be a standout based on its strategic and financial performance. So excelling in a down year was quite an accomplishment. Illumina is also a two-time winner of this designation, having been selected in 2009 (see IBO 1/15/10), interestingly, a year that was also a major challenge for the industry.

To say that Illumina had a good year would be a major understatement. It just announced that revenue for 2013 was $1.421 billion, an increase of 24% (see page 2), when the overall industry barely expanded at a 2% rate (see page 1). Illumina is also solidly profitable, with a net profit margin of almost 9%. The company invests aggressively in its technology, with R&D spending of about 20% of sales. It recently reorganized, with emphasis on the existing personnel who have contributed to its strong historical performance (see IBO 10/31/13). While other firms have reduced employees for various reasons, Illumina added 750 employees in 2013, with 250 coming from acquisitions.

Illumina made two important acquisitions in 2013. In July, it acquired Advanced Liquid Logic (see IBO 7/31/13), a microfluidics technology firm, whose technology will be used to streamline next generation sequencing (NGS) workflows. In October, it acquired NextBio (see IBO 10/31/13), a provider of genomics informatics solutions, to more effectively deal with the large quantities of NGS data. These additions strengthened Illumina’s overall capabilities and also aid its efforts to address the attractive molecular diagnostics market. In that regard, Illumina’s MiSeqDx was cleared by the FDA this year as the first and only IVD NGS system. The FDA also approved two Illumina tests for cystic fibrosis. Perhaps most significantly, the company’s FDA-approved Universal Kit reagents allow clinical laboratories to develop their own tests for the MiSeqDx.

So Illumina is well on its way to becoming a strong participant in the molecular diagnostics market, while also being the dominant supplier of DNA sequencing and microarray technology. Such a goal has been accomplished in spite of entrenched competition and difficult market conditions.

Illumina’s growth and profitability, coupled with its well accepted technology and growing market, position it among the top 10 industry suppliers. It has been recognized in the equity markets as well. In 2013, Illumina’s stock price soared, doubling since 2012. It has a market capitalization of over $15 billion and a price-to-earnings ratio of 130. As of this writing, Illumina’s stock price exceeds $120. So, for 2013, it is safe to say that Illumina was a star performer in an expanding galaxy of its own making. The future for Illumina seems bright indeed.