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Illumina (ILMN)-Harvard Pilgrim Partner to Expand WGS Access

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Zacks Equity Research
·4 min read
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Illumina, Inc. ILMN recently announced a risk-sharing agreement with Harvard Pilgrim Health Care to make whole-genome sequencing (“WGS”) available to eligible Harvard Pilgrim members. Notably, this program will be effective from Jan 1, 2021 and will leverage WGS to enable faster diagnoses of genetic diseases in children.

During the term of the agreement, Harvard Pilgrim will provide WGS to eligible pediatric patients via their network of lab providers. Also, Illumina and Harvard Pilgrim will share the risk on genetic testing costs. Both parties will also analyze the data, adjudicate (make a formal judgement on) the financials and prepare a peer-reviewed study for publication. Further, they will evaluate the impact of insurance coverage of WGS on patient care and healthcare costs.

With the latest collaboration, Illumina aims to strengthen its Life Sciences business worldwide.

Rationale Behind the Collaboration

The collaboration is expected to accelerate the diagnoses of genetic diseases in children, thus eliminating the long and costly diagnostic journey and improve patient outcomes.

For investors’ note, there are more than 20 peer-reviewed publications which illustrate the clinical utility of WGS in more than 3,000 patients with suspected genetic diseases. Also, health economic models predict that the implementation of WGS earlier in the diagnostic process is likely to be cost-neutral and may even save payers’ money.

Per management, an accelerated diagnosis of genetic condition will not only improve patient outcomes but will also focus on the economics by means of cost reductions.

Industry Prospects

Per a report by Research And Markets published on GlobeNewswire, the global whole-genome and exome sequencing market was valued at $497.1 million in 2018 and is projected to grow over $7,303 million by 2029 at a CAGR of approximately 26.9%. Factors like rising prevalence of genetic disorders and various types of cancer are expected to drive the market.

Given the market potential, the collaboration seems to have been timed well.

Notable Developments

Illumina has been witnessing a slew of developments across its business over the past few months.

The company, in November, announced the commercial availability of the P3 high-output flow cell, thus expanding the reach of the NextSeq 2000 Sequencing System.

Illumina, during its third-quarter earnings call in October, confirmed that Australia had recently announced the reimbursement of whole-exome or genome sequencing to identify the genetic cause of intellectual disabilities.

In September, the company entered into a definitive agreement with a healthcare company — GRAIL — to help transform cancer care using genomics and the Next-generation sequencing platform. The same month, Illumina announced that the Australian public health laboratories will aim to sequence the virus genomes of all positive COVID-19 tests in Australia. This will track COVID-19 using genomics across the country, rather than state by state, under a ground-breaking initiative spearheaded by Australia’s public health laboratory organisations and leading industry partners.

The company, in August, launched the NovaSeq 6000 v1.5 Reagent Kit to make whole-genome sequencing more accessible and affordable for labs of all sizes.

Price Performance

Shares of the company have gained 4.8% in the past year compared with the industry’s 6.3% rise and S&P 500’s 18.2% growth.

Zacks Rank & Key Picks

Currently, Illumina carries a Zacks Rank #3 (Hold).

Some better-ranked stocks from the broader medical space are Hologic, Inc. HOLX, Thermo Fisher Scientific Inc. TMO and ResMed Inc. RMD.

Hologic’s long-term earnings growth rate is estimated at 17.4%. The company presently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Thermo Fisher’s long-term earnings growth rate is estimated at 18%. It currently carries a Zacks Rank #2 (Buy).

ResMed’s long-term earnings growth rate is estimated at 14.5%. The company presently carries a Zacks Rank #2.

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Illumina, Inc. (ILMN) : Free Stock Analysis Report
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