Illumina Forms New Company, Updates Guidance and Announces Purchase
“Only Illumina can sequence at the price points necessary to enable the large-scale trials required to demonstrate clinical utility and ultimately market a test that is sensitive and economical across global populations,” said Mr. Flatley. Illumina will have a long-term supply agreement with GRAIL and will be entitled to royalties from GRAIL tests as well as the ability to market any nonscreening GRAIL-developed assays as RUO or IVD products. GRAIL plans to start a 100,000–300,000 person clinical trial this year and commercialize the pan-cancer test in 2019 at a price point of $1,000, with tests for specific cancers, such as breast and lung, possibly commercialized before then. The company’s Conexio acquisition builds on the success of its TruSight HLA sequencer, of which about 160 systems had shipping to 60 unique customers as of the end of 2015, according to Mr. Flatley.
San Diego, CA 1/10/16; San Francisco, CA 1/11/16—Illumina has announced the formation of GRAIL, which will develop pan-cancer screening tests by directly measuring circulating tumor nucleic acids using sequencing. GRAIL is majority owned by Illumina and has raised more than $100 million in Series A financing. “By enabling the early detection of cancer in asymptomatic individuals through a simple blood screen, we aim to massively decrease cancer mortality by detecting the disease at a curable stage,” stated Illumina CEO Jay Flatley, who serves as GRAIL’s chairman. GRAIL is actively searching for a CEO. Illumina’s circulating tumor nucleic acid projects will be transferred to GRAIL. At this month’s JP Morgan Healthcare Conference, Illumina disclosed that it has made an initial $40 million investment in GRAIL, which will be $0.15 dilutive in 2016 to nonGAAP EPS attributable to Illumina shareholders. Mr. Flatley also announced that earlier in January Illumina acquired Conexio Genomics to expand its capabilities in the HLA market. “Conexio is a leading innovator in HLA sequencing and, in fact, they are the company that we used for the software in our TruSight HLA product,” commented Mr. Flatley. Also, at the Conference and on an analysts call, Illumina announced preliminary fourth quarter 2015 revenues of around $590 million, a 15% increase, or an 18% increase in constant currency, led by strong desktop sequencer sales and a 30% increase in sales for sequencing consumables. Consequently, 2015 revenues are estimated to increase 19%, 23% on a constant currency basis, to around $2,218 million. Revenues for 2016 are estimated to grow 16%, with NonGAAP EPS expected to be $3.55–$3.65.
