No Doubt: This is the Top Gene-Sequencing Stock to Buy This Year
4/21/2017 5:54:14 AM
April 21, 2017
By Mark Terry, BioSpace.com Breaking News Staff
With personalized medicine looming on the horizon, the need for laboratories to sequence human genes and/or genomes is only going to grow. With that in mind, Brian Orelli, writing for The Motley Fool, examines the four top gene-sequencing companies.
Without a doubt, Illumina (ILMN) is the leader in the field. About 84 percent of its revenue comes from gene-sequencing technology, accounting for $2 billion. That’s more than double its closest competitor, Pacific Biosciences of California (PACB).
Orelli notes that it’s essentially a two-company race between Illumina and Pacific Biosciences, and that their technology platforms do the job in two different ways. He writes, “Pacific Biosciences’ single molecule, real-time (SMRT) technology produces long reads while Illumina’s technology involves breaking up the DNA into small fragments that are then sequenced. Breaking up the DNA limits the applications that Illumina’s machines are capable of. The short sequences have to be lined up to a known sequence, so sequencing new organisms would be very hard to do. The short sequences also make it hard to interpret regions of the genomes that repeat since it isn’t clear where that fragment came from.”
However, Illumina’s NovaSeq has the potential to bring the cost of sequencing the human genome down to $100 eventually, and is the first company to bring it below $1,000.
Illumina stock is currently trading for $175.95.
2. Pacific Biosciences of California
All of Pacific Biosciences PACB)’ revenue comes from gene sequencing, about $91 million, less than half of Illumina’s. Orelli notes, “Pacific Biosciences will be able to fill the niches where Illumina’s machines don’t perform well, but researchers will migrate to Illumina’s machines for applications where its machine are capable—which would include most human genome studies that make up a large percent of the future market—simply because it’s cheaper to use Illumina’s machines.”
On January 16, Pacific Biosciences announced that Novogene Corporation had agreed to buy 10 Sequel Systems, as well as Iso-Seq annotation and targeted sequencing services.
“Novogene is a global leader in de novo sequencing and assembly today, and our purchase of ten PacBio Sequel Systems will advance our ability to produce even higher quality and more complete de novo genome assemblies,” said Ruiqiang Li, founder and chief executive officer of Novogene, in a statement. “The addition of these systems, and the ability to sequence large genomic libraries that yield mean read lengths of 10-18kb, also will enable us to meet the growing demand for SMRT Sequencing and to deliver more cost-effective de novo sequencing and assembly solutions for our customers. With this purchase, we expect to have the world’s largest SMRT Sequencing facility.”
Pacific Biosciences stock is currently trading for $4.86.
3. Qiagen and 4. Thermo Fisher Scientific
Orelli notes that Qiagen (QGEN) and Thermo Fisher Scientific (TMO) don’t focus on gene sequencing and using the growth of gene sequencing as a benchmark for a company’s growth doesn’t really apply for these two. Qiagen’s gene sequencing instrument is GeneReader. Thermo Fisher Scientific’s is Ion Torrent.
Qiagen’s flagship platform is QIAsymphony RGQ, which is an assay and real-time PCR and sequencing product. It also a big portfolio of consumables and bioinformatics.
On April 3, the company announced that its GeneReader NGS System had received further validation with the publication of five new independent studies reaffirming the systems analytical performance. They were presented at the Global Congress on Molecular Pathology in Berlin.
Qiagen stock is currently trading for $28.72.
Thermo Fisher is an enormous company with annual revenue exceeding $18 billion with more than 55,000 employees worldwide.
Thermo Fisher stock is currently trading for $155.31.
Based on gene sequencing alone, Orelli thinks Illumina (ILMN) is the company to beat. It has spun off a company called Helix, he writes, “that’s developing a store where developers can sell apps to analyze the DNA sequence while Helix takes a percentage of the developers’ sales.”
It has also spun off a company called GRAIL, which is using Illumina’s sequencers to screen for cancer DNA in blood samples.
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