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Illumina, Amgen Ally for Diagnostic Test

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Illumina Inc.(NASD:ILMN) is collaborating with Amgen Inc. (NASD:AMGN) to develop and market a multigene next generation sequencing (NGS)-based test, which will be used as a companion diagnostic for Amgen’s cancer treatment, Vectibix. The financial details of the transaction, however, remain undisclosed.

This in vitro diagnostic test will be based on ILMN’s sequencing and genotyping technology platform, MiSeqDx, which is already approved in the U.S. as well as the EU. The test will identify RAS mutation status of patients and will help identify patients eligible to be treated with Vectibix. Vectibix is approved in the U.S and EU, as a treatment method suitable for metastatic colorectal cancer in patients whose disease has progressed while on or after undergoing chemotherapy.

Per the agreement, both companies will seek the FDA approval and CE Mark for the multigene test. Once approval is gained, Illumina will focus on marketing the test in the U.S. and the EU.

Next generation sequencing is a hi-tech platform designed to perform advanced research on DNA or RNA molecules.

We believe the NGS platform offers great market potential. The Amgen deal is in line with Illumina’s efforts to strengthen its presence in this space – earlier this month, Illumina had entered into a strategic partnership with Quest Diagnostics Inc. (NYSE:DGX) allowing the latter to use the MiseqDX platform and related reagents for molecular laboratory-developed tests.

We are optimistic about management’s expansion strategy through the enhancement of the company's portfolio of sequencing products and development of strategic partnerships with therapeutics and diagnostic services providers.

Currently, Illumina has a Zacks Rank #3 (Hold). A better-ranked stock in the broader healthcare sector is Actelion Ltd. (OTC:ALIOF), carrying a Zacks Rank #1 (Strong Buy).

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