Illumina (ILMN) Extends Partnership to Advance Cancer Test
Illumina, Inc. ILMN recently entered into an agreement with Janssen Research & Development, LLC (Janssen) to develop its novel molecular residual disease (MRD) assay. The assay is a multi-cancer whole-genome sequencing (WGS) research solution that detects circulating tumor DNA (ctDNA) to better understand disease persistence or recurrence following treatment intervention.
It is worth mentioning that MRD testing is increasingly being used in cancer as a predictive indication of disease recurrence following treatment, assisting doctors in assessing the effectiveness of a patient's current course of clinical intervention and guiding their decisions for precision medicine.
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MRD testing for solid tumors shows promise for enhancing the standard of care in areas where current disease-monitoring techniques fall short in reliably recognizing patients' responses to therapy.
The Illumina WGS MRD assay, which is currently in development, will detect ctDNA for MRD assessment in research settings that examine samples from cancer patients with diverse solid tumor indications. Unlike existing MRD systems with complex workflows, Illumina intends to build a research solution that will provide a cost-effective, highly sensitive and automated workflow with a potential turnaround time of five to seven days.
Strategic Implications
This collaboration highlights the importance of Illumina's unique MRD technology and the promise of the company's whole-genome approach in oncology. Illumina hopes to accelerate clinical research in oncology by developing a sensitive, accurate and easily accessible assay in collaboration with pharma partners such as Janssen.
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Illumina aims to work with other pharmaceutical industry leaders to enhance and expand the utility of its WGS MRD assay.
Industry Prospects
Per a report by Grand View Research, the global minimal residual disease testing market size was estimated at USD 1.89 million in 2022 and is expected to witness a CAGR of 11.45% from 2023 to 2030. The minimal residual disease testing market is witnessing growth due to factors such as the increasing prevalence of cancer, increasing consumer awareness for therapy and increasing funding for research with an increasing disposable income in emerging economies.
Progress Within NGS-Based Testing
An expanding NGS oncology portfolio is helping Illumina drive the revolution in cancer genomics. Over the years, the company has developed multiple pharma partnerships to bring custom panel tests to the market. Even as others enter the market, Illumina boasts confidence in remaining the key player, taking strength from the two-and-a-half-decade-long built infrastructure, compelling offerings that set the global standard and a deep commitment to innovation for the future.
The company is making significant progress in NGS-based oncology testing reimbursement. Earlier, two of the largest commercial payers in the United States — Anthem and Blue Cross Blue Shield — added comprehensive genomic profiling necessary for appropriate patients with advanced cancers, adding more than 30 million additional covered lives. Europe also benefited from continued coverage progress, while Switzerland recently started reimbursing large next-generation sequencing panels, including comprehensive genomic profiling. Also, Illumina’s market-leading TruSight Oncology assay, TSO 500, is likely to exceed more than $100 million in revenues in 2023, backed by increased utilization and broader adoption.
Price Performance
In the past year, ILMN’s shares have dropped 37.1% against the industry’s fall of 10.2%.
Zacks Rank and Key Picks
Illumina currently carries a Zacks Rank #5 (Strong Sell).
Some better-ranked stocks in the broader medical space are DaVita Inc. DVA, HealthEquity, Inc. HQY and Integer Holdings Corporation ITGR.
DaVita, sporting a Zacks Rank #1 (Strong Buy), has an estimated long-term growth rate of 17.3%. DVA’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 36.6%. You can see the complete list of today’s Zacks #1 Rank stocks here.
DaVita’s shares have gained 38.2% compared with the industry’s 9.4% rise in the past year.
HealthEquity, carrying a Zacks Rank of 2 at present, has an estimated long-term growth rate of 27.5%. HQY’s earnings surpassed estimates in each of the trailing four quarters, with the average being 16.5%.
HealthEquity has increased 8.2% against the industry’s 6.3% decline in the past year.
Integer Holdings, carrying a Zacks Rank of 2 at present, has an estimated long-term growth rate of 15.8%. ITGR’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 11.9%.
Integer Holdings’ shares have rallied 44.9% compared with the industry’s 3.7% rise in the past year.
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