Illumina, MolecularMD To Co-Develop Oncology Diagnostics

In a bid to expand its footprint in the multi-billion dollar cancer therapy market, Illumina, Inc. (NASDAQ:ILMN) has recently inked a co-development partnership with MolecularMD Corporation. MolecularMD offers molecular diagnostics solutions with focus on improving oncology medicines. Financial terms of the deal were, however, kept under wraps.

As per the terms of the agreement, Illumina and MolecularMD will co-develop and commercialize sequencing-based companion diagnostics to support biopharma drug development programs. These programs aim to offer advanced personalized medicines for oncology patients.

Notably, the collaboration will combine Illumina’s expertise in next-generation sequencing (NGS) technology with MolecularMD’s experience in developing precise, standardized molecular testing for new oncology drugs, and their subsequent FDA submissions.

After opening the advanced diagnostic laboratory in Cambridge, MA in 2012 to support clinical trials of NGS solutions-based oncology drug programs, MolecularMD has been deploying NGS diagnostics for a broad range of drug targets and indications. We believe the latest partnership will ramp up the demand for Illumina’s NGS solutions for developing tests under clinical trials supported by MolcularMD.

Interestingly, Illumina has been pursuing strategic partnerships with therapeutic and diagnostic services providers in order to expand its business. As an instance, in recent past, the company had become actively involved in the Chinese precision medicine program for sequencing millions of genomes. It has also undertaken the AstraZeneca project to access 2 million genomes.

These numbers, however, reflect only a small fraction of the sequencing capacity required to fulfill the growing demand for population sequencing programs. This indicates immense room for growth of Illumina’s products, which will boost its profit margins.

Further, to establish itself in the cancer therapeutic space, Illumina created a new company, Grail, which focuses on early cancer detection and aims to reduce global cancer mortality. With Grail, Illumina has been preparing to initiate a large-scale clinical trial in 2017 to demonstrate a stage shift in cancer diagnosis.

Cancer is a deadly disease, which is affecting more and more people every day. We believe that such partnerships will play a crucial role in increasing Illumina’s shares in the global cancer therapeutic market.

Illumina currently carries a Zacks Rank #4 (Sell). Better-ranked medical stocks include Boston Scientific Corporation (NYSE:BSX) , ICU Medical, Inc. (NASDAQ:ICUI) and LeMaitre Vascular, Inc. (NASDAQ:LMAT) . All these stocks carry a Zacks Rank #2 (Buy).