Illumina, Inc. ILMN recently announced the receipt of FDA’s Emergency Use Authorization (EUA) for its COVIDSeq Test, leading the way for large-scale next-generation sequencing-based (NGS) testing for coronavirus. Notably, the test is a high-throughput sequencing-based in vitro diagnostic (IVD) workflow, aiding in the detection of SARS-CoV-2, the virus causing coronavirus.
The COVIDSeq Test, which uses upper respiratory specimens for testing the presence of the SARS-CoV-2, is an end-to-end workflow extending the options available for labs to scale diagnostic testing.
With the recent milestone of receiving the first EUA for a sequencing-based COVID-19 diagnostic test, Illumina aims to strengthen its IVD testing portfolio across the globe.
More on the Test
The COVIDSeq is currently available to a limited number of early access sites. However, it is expected to be more widely available this summer. The test is only authorized for use in laboratories in the United States, under the Clinical Laboratory Improvement Amendments of 1988 certification. However, outside the United States, it will be labeled either as Research Use Only or per local regulatory labeling.
As the test has not yet been approved by the FDA, it is authorized by it under an EUA only for the duration of the declaration that circumstances exist justifying the authorization of emergency use of IVD for detection and/or diagnosis of COVID-19.
Significance of the Approval
Illumina’s COVIDSeq Test delivers sample receipt to result in 24 hours using the company’s NovaSeq 6000 Sequencing System. The test has designed to target the full SARS-CoV-2 genome, thus paving the way for accurate detection and high sensitivity.
Further, the workflow enables high-volume screening per NovaSeq run, which leverages the S4 flow cell. It also includes steps for viral RNA extraction and RNA-to-CDNA conversion, to name a few. The key components leveraged include the NovaSeq 6000 along with Illumina’s Tagmentation library preparation technology and the DRAGEN COVIDSeq Test Pipeline for faster reporting.
Per a report by Allied Market Research, the global IVD market size was valued at $67,111 million in 2019 and is estimated to reach $91,093 million at a CAGR of 4.8% from 2020 to 2027. Factors like the growing elderly population, rise in use of personalized medicines for the treatment of various chronic diseases and technological advancements are expected to drive the market.
Given the market potential, the timing of the receipt of the EUA seems strategic for the company.
Recent Coronavirus-Related Developments
Of late, Illumina has been contributing significantly to the COVID-19-related healthcare support worldwide.
The company launched the SARS-CoV-2 Data Toolkit in April, which is a new suite of data analysis tools and workflow functionality for researchers working on the virus using NGS. Currently, Illumina is providing the toolkit free of charge to the global research community to support the efforts of combatting the pandemic.
In the same month, Illumina donated sequencing systems and related consumables to support the expansion of SARS-CoV-2 sequencing capabilities and capacity in up to 10 African countries.
Shares of the company have gained 11.6% in the past six months compared with the industry’s 6.6% growth and the S&P 500’s 1.9% rise.
Zacks Rank & Other Key Picks
Currently, Illumina carries a Zacks Rank #2 (Buy).
A few other top-ranked stocks from the broader medical space are Aphria Inc. APHA, Hologic, Inc. HOLX and QIAGEN N.V. QGEN.
Aphria’s long-term earnings growth rate is projected at 24.6%. It currently carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Hologic’s long-term earnings growth rate is estimated at 7%. The company presently has a Zacks Rank #2.
QIAGEN’s long-term earnings growth rate is estimated at 12.2%. It currently sports a Zacks Rank #1.
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