With the virtual J.P. Morgan 40th Healthcare Conference as its backdrop, Illumina has unveiled new technologies intended to enhance future next-generation sequencing (NGS) solutions, along with a preview of results that CEO Francis deSouza said reflected a “very strong” fourth quarter and an “exceptional” 2021.
deSouza disclosed that his company has developed a new sequencing-by-synthesis (SBS) chemistry—codenamed “Chemistry X” pending a permanent name. He said Chemistry X will deliver 2x faster cycle times, as well as 2x longer reads, and 3x greater accuracy than the company’s current SBS chemistry.
Additional details of Chemistry X are expected to emerge this fall, when Illumina holds its annual customer/investor day.
“By leveraging the world’s largest proprietary pipeline of SBS technology development, we’ve engineered novel dyes, linkers, blocks, and polymerases to deliver a new standard and performance,” deSouza said.
The blocking chemistry is totally new and superior to Illumina’s existing chemistry, Alex Aravanis, MD, PhD, CTO and head of research and product development, told GEN Edge.
“That is one of the parts that give this new chemistry and the products the benefits of the increased read length and increased accuracy,” Aravanis said. “We also engineered a new DNA polymerase that goes hand-in-hand with the new chemistry to do the sequencing by polymerase. It’s faster, and incorporating nucleotides, and does it with even higher fidelity.”
That new chemistry, Aravanis and deSouza added, will enable Illumina to deliver on its long-expressed goal of driving the cost of sequencing down to a “$100 genome”—a commitment deSouza first articulated at the 2017 J.P. Morgan conference, and discussed with analysts at the conference two years later.
“These quantum steps forward in sequencing technology will generate the cost efficiency on our path toward the $100 genome, leading to greater access, deeper sequencing, and the next wave of genomic discovery,” deSouza predicted.
Illumina has filed for new patents for chemistry and related intellectual property and is developing a new “large-scale” manufacturing facility to produce the new chemistry. Illumina has not disclosed the location or other details of its planned manufacturing facility for Chemistry X.
Aravanis said the new chemistry will be protected by IP stretching to 2039. That would extend by more than a decade Illumina’s patent protection for its chemistry, which faces expiration in 2023–24 as well as growing competition from rivals, according to Puneet Souda, managing director, life science tools and diagnostics and a senior research analyst with SVB Leerink.
Souda wrote that the announcement of Chemistry X was “incrementally positive” but less than the new product announcement that had been speculated in days leading up to the conference. The only hint of a new product was deSouza saying Illumina planned to launch its NovaSeq Dx, including a version designed for use in China, later this year.
Illumina’s highlighting of Chemistry X comes a month after La Jolla-based Singular Genomics Systems launched its new G4 sequencing platform based on an all-new proprietary four-color SBS chemistry. The chemistry includes its own polymers, enzymes, and nucleotides, designed to provide highly accurate paired-read sequencing, and fast sequencing cycle times that reduce run times from days to hours.
Aravanis said Chemistry X was not a response to Singular but “the result of years of planning for our next product and to meet customer needs.”
“We have a very long technology roadmap. We invest tremendously in R&D,” Aravanis said. “We have today the leading technology on the market.”
deSouza also unveiled a new patented technology called Infinity, which Illumina plans to launch in the second half of this year. He said Infinity would yield a “highly accurate and cost effective” long-read workflow that will be capable of running on its NovaSeq 6000 sequencing system, delivering contiguous data reads up to 10 kb in length.
Illumina says its long-read capability is aimed at gleaning insights from the 5% of the genome that are not apparent from the company’s short-read sequencing systems.
“Infinity will produce the complete sequence of the original single DNA molecules. It can be fully automated and is seamlessly compatible with SBS, enabling it to be rapidly applied across our entire 20,000 instrument install base,” deSouza said. “It enables 10x greater throughput with 90% less DNA input than standard workflows for traditional long-read platforms. We have the pipeline to deliver this technology at 10x lower cost than on-market legacy long reads.”
He said Illumina anticipates launching Infinity through an early-access program in the second half of this year.
“This changes the short- vs. long-read debate and, more importantly, changes how researchers and patients can get critical answers for rare disease,” stated Euan A. Ashley, MB ChB, DPhil, medical director of Stanford Clinical Genomics and an early collaborator in the development of Infinity, along with Shawn Levy, PhD, a faculty investigator at the HudsonAlpha Institute for Biotechnology.
“This technology can take us the rest of the way to the full genome, and with the speed, scale, and compatibility with existing Illumina, we could rapidly onboard this workflow,” Levy stated.
Keith Robison, PhD, who monitors developments in genomics through his blog Omics! Omics!, counters that Illumina isn’t the only sequencing company to develop low-input protocols, citing Oxford Nanopore and PacBio, which uses PCR amplification to help users get enough material for sequencing.
“Illumina may not be making a fair comparison here,” Robison said. “[It] also won’t get base modifications like a no-amp [Oxford Nanopore] or PacBio can.”
Robison added that the 10-kb read limit “may be trouble for some apps, but does open a lot of space up. But that oversampling drives up cost. I’m not sure what the factor is but 10X isn’t an unreasonable lower bound, so a 30X genome would then require 300X coverage.”
As with the new chemistry, Illumina said its new offering was more a response to market needs than a direct challenge to a rival—in this case, PacBio, which has long shown strength in long reads.
That strength was reinforced when PacBio announced at J.P. Morgan an expanded research collaboration (of undisclosed value) with Google, through which PacBio aims to optimize its long-read sequencing data analysis. PacBio agreed to explore the use of Google’s genomic analysis, machine learning, and algorithm development tools to further improve PacBio’s variant calls for HiFi sequencing runs.
Native or synthetic long reads?
Asked by J.P. Morgan analyst Tycho Peterson whether the long reads will be native or synthetic, deSouza responded: “This is really exciting because it’s different from anything you’ve seen on the market.”
“When we talk to customers about… the synthetic long reads that are brought to market, they told us, ‘there were a number of problems that still needed to be solved’,” deSouza said. “They didn’t want additional instrumentation… they wanted it to be seamless and integrated with existing instruments. I’m really excited about the breakthroughs our teams have been able to achieve in the last couple of years to come up with this Infinity technology.”
Souda observed that SVB Leerink’s global expert network MedaCORP considers Infinity a synthetic long-read (SLR) technology vs the native long-read solutions of PacBio and Oxford Nanopore. (Oxford Nanopore is the pioneer developer of DNA/RNA nanopore sensing tools that include its pocket-sized MinION DNA/RNA sequencer—and which went public in September, through an IPO that raised about £330 million [about $450 million] in net proceeds and valued the company at nearly £5 billion [$6.8 billion].)
“Though the technology promises SBS benefits of limited samples and lower costs, we believe the topic of whether it raises significant concerns for native long-read technologies (including PACB and ONT-Lon) is likely to be debated over the next few quarters,” Souda added.
That debate spilled over onto Twitter, where numerous researchers opined Tuesday that Illumina may have acquired the Morphoseq™ platform and its developer, Longas Technologies. The synthetic platform ran on Illumina technology, several Longas staffers have joined Illumina, and Longas’ website and Twitter account have shut down.
deSouza also highlighted Illumina’s announcement last week of a co-development agreement with SomaLogic that is intended to bring SomaLogic’s SomaScan® Proteomics Assay onto Illumina’s current and future high-throughput NGS platforms—expanding Illumina into high-plex proteomics. A product launch is planned for 2024.
The companies reason that by combining the power of SomaScan with Illumina’s existing and future NGS platforms, researchers can analyze thousands of samples for more than 10,000 protein targets.
“We’re going to manufacture and make the product, we’re going to distribute it, and market it. We’re also going to have an analysis tool that allows people to analyze the proteomics data coming off the sequencer, and then also integrate it with genomic data, so they can do combined analysis,” Aravanis explained.
“It’s really a whole new frontier for us. We think it’s a natural extension of genomics. It’s a very high-intensity sequencing application and we’re excited about our ability to bring what we think will be the highest flexibility in terms of number of proteins and also in terms of high throughput.”
One product launch Illumina continues to schedule for this quarter is that of a new version 3.10 of bioinformatics technology for its DRAGEN™ platform, designed to support DNA, RNA, methylation, and a novel Bayesian theory approach to machine learning. The new tech is intended to enable the fastest, lowest cost, and most accurate analysis of any platform—thus “providing a new standard of end-to-end genome analysis exclusively to Illumina customers,” deSouza said.
GRAIL and partnerships
Illumina has acquired GRAIL for $8 billion in a deal it announced in 2020 and completed in August 2021 without waiting for authorization from the European Commission (EC), which oversees European Union competition policy. The EC is investigating the deal, as has the U.S. Federal Trade Commission, which has raised qualms about the potential stifling of innovation. Illumina has agreed to keep GRAIL separate during the investigation, but contends the EC lacks jurisdiction, and has challenged the review authority of EC executive vice president Margrethe Vestager, in charge of competition policy. The EC could fine the companies up to 10% of their annual worldwide revenue when it announces findings next month.
deSouza offered updates on Illumina’s GRAIL subsidiary and several collaborations of undisclosed value at J.P. Morgan:
- GRAIL MRD Test: deSouza said GRAIL was on track to launch its blood-only minimal residue disease (MRD) test in 2023 and has engaged with 14 pharma partners concerning multiple tumor types. GRAIL says its MRD test will enable a 2x–3x reduction in turnaround time compared with approaches that require tissue biopsies.
- GRAIL Galleri™ Update: Galleri, launched last year, is a multi-cancer early detection blood test—the world’s first to be clinically validated in a screening population, according to Illumina—and capable of detecting more than 50 different types of cancer. Galleri was used last year by 11 employers across industries, and more than 1,500 prescribing providers, including the U.K. NHS, the Cleveland Clinic, the Mayo Clinic, and the Knight Cancer Institute, deSouza said.
- Agendia IVD Tests—Illumina said it signed a multi-year partnership with Agendia, a precision oncology company focused on breast cancer, to co-develop in vitro diagnostic (IVD) tests for improved breast cancer therapy monitoring and recurrence risk using Illumina’s MiSeqDx sequencing platform, expanding the range of small, targeted gene panels available for solid tumor analysis. The partnership is intended to advance the use of NGS for decentralized oncology testing. Agendia expects its flagship test MammaPrint®, which is FDA-cleared and currently offered via Agendia’s central laboratory, to be the first decentralized NGS-based breast cancer recurrence risk test to gain FDA clearance.
- Boehringer Ingelheim (BI) CDx—Illumina said it will partner with Boehringer Ingelheim to develop companion diagnostics (CDx) for several programs in BI’s oncology pipeline. The partnership spans current and future CDx programs, with plans to add CDx claims to an in vitro diagnostic test Illumina is developing that is based on the content of TruSight™ Oncology 500 (TSO 500). The first program will co-develop a CDx for a BI investigational medicine, Illumina said.
- Nashville Biosciences Collaboration—Nashville Biosciences, a wholly-owned subsidiary of Vanderbilt University Medical Center (VUMC), has signed a multi-year agreement with Illumina to accelerate development of therapies through large-scale genomics. The partners said they will join to analyze data derived from VUMC’s BioVU® biobank of approximately 250,000 de-identified human DNA samples and associated longitudinal, structured medical data—as well as establish a commercial alliance of multiple pharmaceutical and biotechnology partners to analyze data for drug discovery and therapy development.
deSouza’s presentation also included financial updates for 2021 and 2022:
- 2020 preliminary results: Illumina said it finished last year with about $4.517 billion in revenue, up 39% from 2020, including about $1.19 billion in fourth-quarter revenue, up 25% over pandemic-skewed Q4 2020 and ahead of Wall Street forecasts for 15% quarterly revenue growth. The company said it will report fourth-quarter and full-year 2020 results in February.
- 2021 guidance: Illumina is projecting 2021 revenues of between $5.15 billion and $5.24 billion, reflecting 14–16% year-over-year (YOY) revenue growth. That includes $70 million to $90 million in revenue from GRAIL, and figures in YOY revenue increases of about 15% in sequencing, about 18% in sequencing consumables, and about 10% in sequencing instruments. Illumina also furnished a non-GAAP earnings per share (EPS) forecast for 2021 of between $4.00 and $4.20.
- “Meaningfully” ahead: Illumina’s revenue forecast range was “meaningfully” ahead of Wall Street analyst expectations, Souda said. “We believe these results are likely to bring some relief to the shares in the near term, but questions about core execution, LT sustainability of GRAIL, impact of the new Chemistry X, and any benefit from Infinity (new long-read technology) will likely still remain.”