Investing in Illumina (NASDAQ:ILMN) Stocks

Illumina (NYSE: ILMN) is a genomics company headquartered in San Diego. Founded in 1998, the company has become an industry leader through the development of genetic sequencing technology and equipment. Through this work, Illumina products have become the industry standard in a number of different fields. Illumina has stood out as one of the premier innovative companies in the emerging genomics sector, which has garnered significant interest from investors who see the potential for long-term growth. The innovations developed by Illumina have allowed scientists to make significant breakthroughs in the study of diseases and opened the door to countless other clinical and research applications that would never have been possible just a few years ago.

What is Illumina (ILMN)?

Genomics, which refers to the study of genes and their related functions, has been researched for close to four decades. However, the latest wave of innovations has only just opened the door to a whole new frontier of applications within the fields of health and medicine. Illumina’s most prominent product innovations have been in the field of genomic sequencing. Genomic (or genetic) sequencing can best be described as taking a snapshot of an individual's entire genetic material.  Through this process, variations at the molecular level can be detected that can guide treatment options for patients, explore genetic relationships and origins, and determine susceptibility to specific diseases. Advances developed by the company have brought the cost of assembling one genome down from nearly $3 billion in 2003 to $1000 in 2014. These costs are expected to be further lowered to $100 using the company’s newest technology NovaSeq. Lowering these costs will be extremely important to broadening the clinical applications of genetic sequencing. Through their work, Illumina aims to transform the way human health is studied and treated.

Using Illumina's Next Generation Sequencing (NGS) technology, DNA, RNA, and Methylation can be sequenced for a variety of research and clinical uses. NGS allows scientists to study genetic material at a depth that has never been achieved before. Researchers within the field of medicine have been using these new methods to study reproductive health, cancer, microbiology, autoimmune disorders, heart disease, and neurological and psychiatric disorders.

Why does Illumina (ILMN) Matter?

Through innovations in research and development over the past several decades, Illumina has been able to maintain a stronghold in this market. Industry-leading NGS technology is used on Illumina in all their equipment. Illumina offers 6 types of “Sequencers” (machines that sequence genetic material) to meet the needs of a large and diverse client base, from basic medical labs to the world's biggest international research centers.  As a result of this diversification, over 90% of the sequencing data ever generated in the world has used Illumina’s technology.

Due to this market dominance, Illumina has been able to secure several partnerships over the years to further cutting-edge research projects. For example, the company established a public-private partnership with the U.S. government during the Ebola outbreak in West Africa. Using Illumina's Sequencers, near real-time data was made available on how the disease was spreading and mutating, giving scientists the opportunity to keep up to speed in their development of vaccines and other treatments. Most recently, Illumina was the first company to have an FDA approved NGS testing device for COVID-19. The technology developed by Illumina has made it possible to tract the genetic origin of infection, giving scientists more insight into the rapid movement of COVID throughout communities. Illumina equipment was also the first to sequence the entire COVID-19 genome in early 2020, allowing scientists to gain crucial insight into the disease in its infancy.

Illumina (ILMN) Prospects

Aside from their current product offering, a key driver for further growth is the acquisition of Grail in 2020 for $8 billion. Grail’s multi-cancer screening test has been called one of the most promising new tools in the fight against cancer. Through blood tests alone, Grail technology has the potential to detect over 50 types of cancer in their earliest stages. With venture capital investment from names such as Jeff Bezos and Bill Gates, Grail is well-positioned to capitalize on synergies with Illumina. Grail is already powered by Illumina NGS technology, and bringing these two companies together will further solidify this relationship. Known as a liquid biopsy, the blood test technology has already undergone clinical trials and is aiming for FDA approval in the very near future. Once approved, it will be possible for cancer screening to be part of routine yearly physical exams, with a simple blood test being all that would be necessary. The market for early detection cancer tests is estimated to be worth $75 billion by 2035. With this acquisition, Illumina will be able to meet much of this market demand in the coming years.

Grail is just one example of the potential that genomics has for changing the way we look at health and medicine. As research continues to be conducted, more and more applications for Illumina's technology will be discovered. Other interesting avenues for potential growth are within the field of reproductive medicine, with prenatal screening and other broad clinical applications currently in development.

Where to Buy Illumina (ILMN) Stocks

A broker that we recommend is Firstrade.

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Summary

Illumina technology has completely changed the way the scientific community studies human genetics. Through decades of innovation, the company has taken strides that have laid the groundwork for amazing developments in research. It is likely that countless applications for genomic research are yet to be discovered, and the market's reliance on Illumina equipment means the company is well-positioned to continue growing well into the future.