A Restless Illumina on Display in CEO's J.P. Morgan Address
By Aaron Krol
January 13, 2015 | Yesterday, Illumina CEO Jay Flatley gave his annual address at the J.P. Morgan Healthcare Conference in San Francisco, one year after using his J.P. Morgan slot to announce the launch of the HiSeq X, the fastest and highest-throughput DNA sequencer in the world and the first instrument that could realistically claim to sequence whole human genomes for $1,000 apiece. Uptake of that system has been remarkably fast: Flatley noted yesterday that Illumina has installed 134 HiSeq X’s, all in batteries of ten or more, making that instrument its biggest revenue driver of the past year.
Illumina has plainly decided that J.P. Morgan is its venue of choice for major announcements. Possibly that’s to undercut competitors who save many of their big unveilings for the Advances in Genome Biology and Technology conference in February. Or maybe it’s a statement about how far Illumina has come in the life sciences industry — no longer a niche player whose products will be mainly of interest to specialists, but a core part of the biomedical ecosystem whose announcements rank alongside those of the big pharma and biotech companies that dominate the J.P. Morgan event.
This year’s address also saw the release of several new products, but unlike last year, they did not overshadow a larger theme of Flatley’s presentation. Illumina has recently engineered a corporate shift from seeing itself primarily as a platform provider, to taking on ownership of the biggest applications of its technology. Those include rare disease diagnosis, fetal testing, cancer genomics, and integration with national healthcare systems, all areas that Illumina is now pursuing aggressively.
“We’ve historically been able to innovate really rapidly on the array and the sequencing technology platforms, but… customers don’t get the full benefit of all that technology unless they can actually go from a sample to an answer,” said Illumina Senior Vice President Kirk Malloy, General Manager of the Life Sciences Business Unit, who spoke to Bio-IT World after Flatley’s address. He said the company has pivoted “to focus more on the end customer, and align ourselves with the problems they’re trying to solve.”
Illumina is furthest along with its non-invasive prenatal testing (NIPT) unit, founded on technology the company picked up with its 2013 acquisition of Verinata Health, backed by a sweeping IP agreement with Sequenom forged last month. NIPT is an area with huge potential, as clinical evidence more and more points toward offering these tests to all pregnant women to detect fetal genetic disorders without resorting to invasive procedures like amniocentesis. Last year, Illumina also made NIPT the flagship of an effort to clear its high-throughput HiSeq 2500 platform with the FDA for clinical use.
Flatley has now announced a new iteration of Illumina’s NIPT technology, the VeriSeq test, which could be a major breakthrough in this market. VeriSeq is built not for the HiSeq, but for the newer NextSeq 500 instrument. It takes advantage of paired end sequencing to reduce the read depth needed to detect major chromosomal abnormalities in fetal DNA. “The reduction in read depth led to a reduced need in amount of prepared cfDNA to maintain performance, which allowed us to remove PCR amplification from the assay,” said Gustav Karlberg, Illumina’s Senior Market Manager for Reproductive and Genetic Health.
That’s a big deal, because NIPT relies on finding a tiny proportion of fetal DNA in a maternal blood sample, and normally PCR is needed to get enough DNA for analysis. With a smaller sample to work with, VeriSeq can be run many more times in parallel — up to 48 tests on a single NextSeq run, a key advantage for labs trying to extend these tests to very large patient populations.
VeriSeq seems to have triggered a retooling of Illumina’s entire regulatory strategy: the company is now withdrawing the HiSeq 2500 from regulatory consideration, and plans to submit a NextSeq instrument in its place. The NextSeq has several advantages for clinical labs, including a lower price tag, a smaller footprint in the lab, and more automated lab work. “We think the NextSeq is the platform of choice for clinical labs and for NIPT applications,” said Malloy. Still, the new strategy will stall the release of FDA-cleared tests for high-throughput sequencers, and Illumina will now be pushing tests like VeriSeq through the European regulatory system first, hoping for earlier product launches overseas.
Meanwhile, Flatley also announced new standardized Illumina assays for two important areas without serious regulatory hurdles: HLA testing to match transplant donors with recipients, and forensic testing. HLA testing has mainly relied on homebrewed tests up to now, often using Illumina’s MiSeq instruments, while forensic tests have been heavily weighted toward out-of-date technologies and are due for an upgrade to the era of next-generation sequencing. Illumina’s standard tests are now in the field in both markets for active development, and the company is planning full commercial releases in 2015.
The most exciting applied area where Illumina is beginning to make headway is cancer testing, likely to be the biggest single market for clinical sequencing in the future, as well as the field where this technology could have the biggest impact for patients. Illumina faces a long road to release patient-facing tests of its own, but it has made strides uniting major players in cancer care through the Actionable Genome Consortium, which includes Illumina and six leading cancer centers. Flatley announced yesterday that the Consortium has agreed on a set of shared standards for defining which mutations are actionable and should be included in genetic tests. Those standards will be published in the scientific literature, and are likely to be adopted by more institutions given the authors’ weight in the field. Tests under these standards will include both “category one” mutations, paired with FDA-approved targeted therapies, and “category two” mutations, matched with drugs in ongoing clinical trials.
Flatley also shared that Illumina is “hard at work on an optimized assay method” for sequencing circulating tumor cells in blood, an approach also known as liquid biopsy. A reliable liquid biopsy test would be a huge step forward for cancer testing, not only as a convenience to patients, but also as a way to extend diagnostics to those patients for whom it would be too risky to perform a traditional biopsy. Like with NIPT, the trouble is getting a large enough signal from the tiny population of tumor cells in the bloodstream to form an accurate deep sequence. Flatley stated that Illumina’s goal is to sell a research use only product for liquid biopsies by the end of 2015, which individual users could adopt for lab-developed cancer tests while Illumina itself works gradually on FDA approval.
A HiSeq in Every Lab
All these applied projects will continue to develop over periods of months and years. In the meantime, the new instruments announced yesterday are all available for immediate sale, and reinforce Illumina’s dominance of the high-end sequencing market.
It’s been widely expected that Illumina would eventually soften its stance on the HiSeq X, which was first made available only in batteries of ten and only for whole human genome sequencing. That was partially borne out yesterday, as Flatley announced an option to buy just five HiSeq X’s (at a price premium of $200,000 more per instrument), but the company is still determined that its most powerful sequencers will be used exclusively to enable huge human population studies. In fact, Illumina has a special interest in government programs that seek to embed genomics into national health records. The Genomes England project, to sequence 100,000 whole human genomes in that country, remains a source of pride for the company, and Flatley yesterday announced a partnership with Lockheed Martin to support similar efforts with other governments.
“The clear direction of healthcare is to incorporate this sort of data,” said Malloy. “We continue to see lots of interest from lots of different countries to use this technology and incorporate it into their standard healthcare.”
Instead of opening up the HiSeq X for other organisms and applications, Illumina is releasing a pair of new sequencers that split the difference between the ultra-high-throughput HiSeq X and the previous state-of-the-art HiSeq 2500. Drosophila labs and transcriptome researchers who were eager to hack into the HiSeq X can now purchase a HiSeq 3000 or 4000, which Malloy describes as souped-up HiSeq 2500s.
Although these new instruments do not have the efficient bidirectional optics system of the HiSeq X, or its unique chemistry and software, they do take advantage of its most important innovation: a patterned flow cell that helps control where synthesis takes place, making it easier to detect reactions. The HiSeq 4000 can process two of these flow cells per run, while the 3000 uses one flow cell at a time; the reported throughput per flow cell is over 200 Gb a day.
“The advantage of the 4000 is you can get access to the patterned flow cell and the kinetic exclusion amplification, and people are free to do whatever applications or organisms they want,” said Malloy.
With the new instruments, Illumina now offers four platforms at the top end of the sequencing market, selling at a wide spread of price points: a HiSeq X Five or X Ten system at $6 million and $10 million, respectively; the HiSeq 4000 at $900,000; the HiSeq 3000 at $740,000, with the option to later upgrade to a HiSeq 4000; and the HiSeq 2500, reduced in price as of yesterday to $690,000. This catalogue seems like an effort to get the highest possible volume of sequencing into the greatest possible number of labs, which is in line with Illumina’s business philosophy — more sequencing means a faster pace of discovery, which leads to new use cases, which leads to yet more demand for sequencers.
At the same time, Malloy emphasized, “innovating on both the high and the low end is foundational as a company strategy.” The baby of the Illumina family, the MiSeq ($99,000), had a record quarter in Q4 2014, including a tripling of demand for the FDA-cleared MiSeqDx. The mid-range NextSeq 500 ($250,000) is also enjoying high demand, despite early doubts that its two-dye chemistry would be as reliable as the traditional four-dye system. Illumina sold over 500 NextSeqs in 2014, and is now releasing a revised chemistry kit that Flatley said should bring its specifications fully in line with the company’s other sequencers.
In addition, the final new instrument out today is the NextSeq 550 ($275,000), which is capable of array scanning, a form of multiplex targeted gene analysis that can be used for broad genotyping panels or gene expression assays. “We are at a point where NextSeq as a portfolio may soon eclipse some of the HiSeq models in terms of number of units and revenue,” said Malloy.
That will be important for the company’s growth strategy as it presses on with more applied science. While Illumina’s splashiest announcements surround its top-of-the-line sequencers, the MiSeq and NextSeq are the drivers of its clinical programs, and their rapid adoption could mean as much for the future of practical genomics as any number of HiSeq X Ten systems in large academic centers.
