Illumina elucidates the human genome. The firm makes tools used
by life sciences and drug researchers to isolate and analyze
genes. Its systems include the machinery and the software
used to sequence pieces of DNA and RNA, and the means
to put them through large-scale testing of genetic variation
and biological function. Its proprietary BeadArray technology uses
microscopic glass beads which can carry samples through the
genotyping process. The tests allow medical researchers to
determine what genetic combinations are associated with
various diseases, enabling faster diagnosis, better drugs, and
individualized treatment. Customers include pharma and biotech
companies, research centers, and academic institutions.
Illumina's technologies also provide reproductive health
solutions including preimplantation genetic screening and
diagnosis, noninvasive prenatal testing, and neonatal health
For customers who choose not to buy its systems and
consumables, Illumina offers outsourced life science research
services such as genome sequencing and genotyping array
services. Customers for such services include schools, agricultural
and energy biotech research firms, and drug development companies.
In addition, the company has a consumer genomics unit to meet
the growing demand for personal genome sequencing through physician
intermediaries. And while most of the company's revenues come from
providing life sciences equipment and services,
Illumina has also established a small business in the field
of molecular diagnostics, which uses genetic biomarkers to
diagnose clinical health conditions.
Illumina gets about half of its annual revenues from sales in
the US market. Other key regions include Europe (25% of
sales) and the Asia/Pacific region (18%), as well as Latin
America and Canada. The company has increased revenues across
all geographic markets in recent years.
Sales and Marketing
The company's customers include genomic research centers,
universities, government labs, hospitals, reference laboratories,
and private sector clients including pharmaceuticals, biotech
firms, agrigenomics (livestock genetics testing) firms, commercial
molecular diagnostic companies, and consumer genomics firms. It
sells through life-science distributors in certain markets in
Europe, Latin America, the Middle East, the Asia/Pacific region,
and South Africa.
In 2014 Illumina spent $16.4 million on advertising, up from
$14.5 million in 2013 and $10.5 million in 2012.
Illumina has steadily augmented its life sciences
product lines, and has experienced rapidly climbing revenues
in recent years as a result. The company reported a 31% increase in
sales in 2014 to some $1.8 billion due to increased instrument
sales (due to new product launches HiSeq X Ten and NextSeq) and
consumable sales (driven by a higher base of installed
equipment), as well as a rise in its sequencing services
segment as its installed base continues to grow.
Net increased more than doubled in 2014, rising 182% to $353
million versus $125 million in 2013. The increase was led by the
rise in revenue, as well as a gain from legal contingencies related
to an intellectual property settlement with pharmaceutical firm
However, profits dropped by more than 15% to some $125 million
that year due to increased operating expenses from sales and
marketing efforts and R&D programs as Illumina continues
to invest in the growth of the business. Cash flow from operations
grew 30% to $501 million that year as a result of higher profits
and an increase in cash provided by accrued liabilities.
Illumina makes significant investments in research and
development to make its systems faster, more advanced, and more
affordable. (R&D expenses in 2014 were $388.1 million, up from
$276.7 million in 2013.) In early 2014 it upgraded its HiSeq X Ten
and NextSeq 500 platforms with improved technology. In 2013 the
company introduced a simpler gene sequencing panel and a new genome
sequencing technology to help doctors identify genetic causes for
rare or undiagnosed diseases, among other products.
In 2015 the company launched TruSight HLA, an end-to-end
sequencing panel that sequences 11 human leikocyte antigen genes
for accurate typing. It also launched the NeoPrep Library Prep
Sytem to help sequencing-ready libraries prepare for
Illumina is also focused on expanding use of its genomics
products into reproductive health, oncology, and other clinical and
research markets. It has several products in the pipeline to
address these markets.
As part of its strategy to develop and identify new products and
services, the company also seeks suitable products, technologies,
and companies as candidates for acquisition. It also strikes up
partnerships to expand its offerings. In 2015, for example, it
formed a collaboration with Merck Serono (Merck's biopharmaceutical
arm) to develop a next-generation sequencing-based oncology
diagnostic. Also that year it formed an alliance with Lockheed
Martin to develop affordable genomics solutions to provide
personalized health care for national populations. In 2014 entered
separate agreements with bioMériux, Biomnis, Genoma, and the Center
for Human Genetics and Laboratory Diagnostics Martinsried.
Expanding into Russia and the Commonwealth of Independent
States, Illumina established a relationship with Moscow-based life
science distributor Albiogen in 2014.
Mergers and Acquisitions
Acquisitions that have enhanced Illumina's offerings include the
2014 purchase of Myraqa (in-vitro diagnostics, particularly
companion diagnostics) and the 2013 purchases of NextBio (clinical
and genomic informatics), Advanced Liquid Logic (digital
microfluidics and liquid handling), and Varinata Health (which
markets the verifi prenatal test for high-risk pregnancies).