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Gene sequencing giant Illumina reported Q4 numbers on Tuesday after the market close. The San Diego, California based company reported record revenues of $867 million, up 11% year-on-year. For the year 2018, Illumina reported $3.3 billion of revenues, up 21% thanks to strong demand for sequencing and array systems, consumables and services.
On the earnings call, CEO Francis deSouza said "2018 was our 20th consecutive year of growth as genomics continues to enable an increasing number of research, translational and clinical applications across a broad range of customers.
For the quarter, Sequencing consumables revenues came in at $466 million showing growth of 8% but up 23% for the 2018 year to $1.8 billion. Sequencing services and other revenues were $104 million, up 20% year-on-year, largely driven by Genomics England or GeL as it's known.
GeL is a project to sequence 100 000 people in the UK. Illumina is developing the infrastructure to enable the sequencing of those genomes as well as the data management of the project. The idea was to understand health economics of why sequencing helps improve healthcare, for quality of outcome, and reduced cost.
Illumina's goal is to enable flexibility that will enable customers to sequence-on-demand rather than waiting to batch on the larger flow cell. According to a report by Goldman Sachs, Illumina could capture 75% of the exploding gene sequencing market by 2020; a market that is said to reach $20 billion by 2020.
deSouza announced a partnership with Sysmex Corporation where their goal is to commercialise the first Next Generation Sequencing.
In 2019, Illumina expects revenues to grow between 13% and 14%. That guidance excludes any impact from the pending acquisition of Pacific Biosciences which the company expects to bed down mid-year.
Illumina still enjoys margins north of 70% and a big chunk of the sequencing market share thanks to their ability to drive down the costs to consumers. Genome sequencing for example used to cost $100 million in 2001 and today it is less than $1 000. We like the space and we like a dominant player like Illumina!