Illumina, Broad Institute Partner On Secondary Genomic Analysis

Illumina Inc. (NASDAQ:ILMN) recently teamed up with the Broad Institute of MIT and Harvard to co-develop secondary genomic analysis algorithms and software. The partnership will combine Broad Institute’s open-source GATK algorithms with Illumina’s DRAGEN (Dynamic Read Analysis for GENomics) Bio-IT Platform to serve the purpose.

This partnership with the Broad is a major breakthrough on Illumina’s part to develop an advanced open-source software for commonly used methods including small variant (SNV) and large variant (CNV/SV) detection. In this context, last year, the company acquired Edico Genome and DRAGEN.

Financial terms of the deal were kept under wraps.

The GATK and DRAGEN at a Glance

The Broad Institute’s GATK identifies SNPs and indels in germline DNA and RNA sequencing data. In addition to variant callers, GATK includes utilities to perform related tasks, such as processing and quality control of high-throughput sequencing data.

Going by Illumina, the DRAGEN platform delivers rapid secondary analysis for germline and somatic SNV, SV (structural variation), CNV(A) (copy number variation) calling as well as methylation, RNA and repeat expansion workflows. DRAGEN Pipelines can be installed on-premise via a local server and in the cloud through BaseSpace Sequence Hub of Illumina.

The Combined Software

The open-source secondary analysis software will be distributed through the Broad Institute's usual community support channels, namely GitHub. This software will provide a standardized methodology for processing high-throughput sequencing data and performing variant discovery analysis. This will provide improved sensitivity, accuracy and scalability.

This development is expected to enhance Illumina’s portfolio of sequencing products.

Illumina’s Recent Developments on Sequencing

We are optimistic about Illumina’s expansion strategy through new purchases and the development of strategic partnerships with therapeutics and diagnostic services providers.

In terms of strategic acquisitions, Illumina is currently expected to close its $1.2-billion buyout of Pacific Biosciences. The addition of the acquired company's long-read platform will help the acquirer deal with select applications, such as de novo sequencing and the sequencing of highly homologous regions of genomes, more efficiently. This apart, as mentioned earlier, Illumina acquired Edico Genome in 2018 to strengthen the next-generation sequencing (NGS) platform.

Previously, the company formed several alliances including a global strategic partnership with Loxo Oncology (to develop and commercialize a multi-gene panel for broad tumor profiling). Further, the company inked deals with Bristol-Myers and Thermo Fisher Scientific (NYSE:TMO) in the field of next-generation sequencing. All these indicate that Illumina’s products still stand a chance to outreach a large portion of sequencing programs in demand, which in turn, might boost its profit margin.

Zacks Rank & Key Picks

Illumina currently carries a Zacks Rank #3 (Hold). A few better-ranked stocks in the broader medical space are Styker (NYSE:SYK) , Medtronic (NYSE:MDT) and Amedisys (NASDAQ:AMED) , each holding a Zacks Rank #2 (Buy).You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Stryker’s long-term earnings growth rate is expected to be 10.04%.

Medtronic’s long-term earnings growth rate is projected at 7.32%.

Amedisys’ long-term earnings growth rate is anticipated to be 16.26%.

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