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Illumina Goes for the Gold

Submitted by on June 16, 2009 – 6:06 am

Posted by Brian Orelli

Illumina has decided that selling picks and shovels isn’t enough; it’s going for the gold too. Last week the San Diego-based company announced that it’ll be offering a complete genome sequencing service — using its sequencers of course.

The good news is that you’ll be able to get your genome sequenced for half the cost of Illumina’s closest competitor. The bad news is that you’ll still have to shell out $48,000 for the 30X coverage of the 90% of your genome that’s unique enough to be sequenced with the company’s paired-end short-read technology.

To put that in perspective, for that amount you could:

  • Buy this 1-bedroom condo in City Heights
  • Take 488 of your closest friends to a Chargers game.
  • Buy 48 MacBooks; you’ll get a free Apple computer with your sequence on it with your sequencing order though.

Still, getting in now is probably a smart move for Illumina. The price of sequencing is bound to get down to a price that most people can afford it. Working out the kinks — and getting the rich early-adopters to pay for it — is preferable to waiting until there’s a substantial market for the product.

As for San Diego, the announcement likely means a few new jobs for the region as we’re home to Illumina’s new CLIA-certified laboratory. For now the company is sticking with the grunt work and plans to let 23andMe, Navigenics, Decode Genetics, and Knome do the fun part of interpreting what the genetic variations might mean for the patient.

That might be a short-sighted move as Daniel MacArthur of Genetic Future points out. Sequencing could become a low-margin business if competition becomes tight when next-next-generation sequencers become available. Concentrating on hocking the higher-margin sequencers and/or developing a system for interpreting the data might be a better move.

Only time will tell if Illumina has hit gold or pyrite.

Brian Orelli is a freelance analyst/writer based in San Diego. You can find his take on the healthcare industry at places such as The Motley Fool and Nature Biotechnology. You can follow him on twitter @BiologyFool or reach him by e-mail at Brian.Orelli at gmail.com

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