Illumina, Inc. ILMN recently reached a major milestone by surpassing over 200 orders for its revolutionary NovaSeq X sequencing system in the first quarter of 2023. Strong customer demand drives strong orders.
The recent development will further strengthen Illumina’s portfolio of sequencing platforms.
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NovaSeq X delivers high-throughput sequencing that is twice as fast and three times as accurate as earlier Illumina products. It can generate over 20,000 whole genomes per year at the cost of $200 per genome.
In February, scientists at the Broad Institute of MIT and Harvard, the first recipient of a NovaSeq X, presented data validating NovaSeq X Plus. The data confirms that NovaSeq X Plus performance meets or exceeds the NovaSeq 6000. This step-change in performance and the launch of Illumina Complete Long Reads (launched in March 2023) allows customers to run long- and short-read sequencing on the same device, offering flexibility in a simplified and efficient workflow.
Strong Demand Driving NovSeqX Growth
Customers are excited about NovaSeq X's ability to allow and advance new projects that require more samples, more multiomic analyses and depth of sequencing. NovaSeq X also offers an entry point for customers seeking more power and faster results.
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The NovaSeq X has witnessed the strongest pre-launch demand Illumina has ever witnessed for any instrument, and customer enthusiasm continues to grow. The strong orders represent a varied customer base spanning research and clinical customer segments in about 30 countries across five continents, all seeking to add NovaSeq X — the fastest, most powerful and most sustainable high-throughput sequencer available.
Per a report by Grand View Research, the global whole genome sequencing market was valued at $1,645.2 million in 2022 and is expected to expand at a CAGR of 20.06% by 2030. The growing prevalence of genetic disorders and mutations that lead to cancer progression are the main factors driving the market.
Sequencing Growth Continues
During the fourth quarter, Illumina witnessed strong global interest, with orders from more than 25 countries, four times more than in the first quarter of the NovaSeq 6000 launch. Illumina also witnessed stronger-than-expected clinical adoption and orders from new to high-throughput customers bringing sequencing in-house due to NovaSeq X's ease of use and cost benefits.
In mid-throughput, Illumina saw record NextSeq 1K and 2K shipments, up 40% year over year. The upside was driven by the accelerated adoption of multiomics primarily in cancer research and cellular and molecular biology, by new and existing customers. As part of the ongoing innovation road map, the launch of X leap SBS chemistry on NextSeq 1K, 2K remains on track for 2024. The low throughput shipments were up 13% year over year. These instruments continue to provide a great entry point to sequencing.
During the fourth quarter, the NovaSeq X has had the strongest pre-order book of any Illumina instrument launch, and this demand will catalyze a multiyear upgrade cycle.
In the past six months, Illumina has outperformed its industry. The stock has gained 8.2% compared with the 0.6% rise of the industry.
Zacks Rank and Key Picks
Illumina carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader medical space are Hologic, Inc. HOLX, Henry Schein, Inc. HSIC and Avanos Medical, Inc. AVNS.
Hologic, carrying a Zacks Rank #2 (Buy) at present, has an estimated long-term growth rate of 15.2%. HOLX’s earnings surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average beat being 30.6%.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Hologic has inched up 3.1% against the industry’s 16% fall in the past year.
Henry Schein, carrying a Zacks Rank #2 at present, has an estimated long-term growth rate of 8.1%. HSIC’s earnings surpassed estimates in three of the trailing four quarters and matched the same in the other, the average beat being 2.9%.
Henry Schein has lost 7.7% compared with the industry’s 5.5% decline in the past year.
Avanos, carrying a Zacks Rank #2 at present, has an estimated growth rate of 1.8% for 2023. AVNS’ earnings surpassed estimates in all the trailing four quarters, the average beat being 11%.
Avanos has lost 11.8% compared with the industry’s 15.9% decline in the past year.
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