Zacks_Analysts' Blog : Illumina Strengthens Portfolio - Analyst Blog

Recently, Illumina (ILMN) introduced three types of workflow solutions, namely TruSeq Custom Amplicon Kits, New Nextera DNA Sample Preparation Kits and BaseSpace, to support the company’s MiSeq personal sequencer system by delivering a sequencing ecosystem that has a unique integration capability with user friendly qualities.

In a separate development, the company also announced the availability of novel human exome content for three new microarrays, the Infinium HumanExome, OmniExpressExome and HumanOmni5Exome BeadChips. This human exome content provides fast and economical examination of over 250,000 variants within the protein coding regions of the human genome, enabling a range of study types aimed at uncovering functionally relevant disease associations.

Illumina is a leading player in life science tools and integrated systems for the analysis of genetic variation and function. The company provides sequencing and array-based solutions for genotyping, copy number variation analysis, methylation studies, gene expression profiling, and low-multiplex analysis of DNA, RNA, and protein.

The company primarily derives product revenues from the sale of Microarrays and DNA Sequencing products. Product revenues consist of Consumables and Instruments, which generated sales of $159 million (annualized growth of 26.2%) and $107 million (up 53%), respectively, during the second quarter of fiscal 2011.

While significant growth in sequencing products and expanded info base of sequencers were responsible for the robust growth in consumables, the growth in instrument revenues was attributable to the success of HiSeqs, HiScan and HiScanSQ systems instrument.

However, the company faces tough competition from Affymetrix (AFFX), which is also a major provider of microarray technologies primarily used in the field of genetic research. Presently, Illumina retains a short-term Zacks#4 Rank (Sell rating). However, based on the company’s future potentiality and huge untapped market, we hold a ‘Neutral’ recommendation on the stock over the long term.