Competition from the Marketplace to the Courtroom

The hottest subject in the biological research equipment field has to be whole genome sequencing; hence it is no surprise that companies execute mergers and acquisitions in order to position themselves to go after their competitors in an attempt to corner this valuable market.

A bit of the background history: Illumina was started a decade ago to build DNA chip arrays by people with experience at Affymetrix, when the latter was the first and absolute leader in the DNA chip field. For years, rather than providing DNA chips, Illumina was known for generating revenue by selling oligonucleotides at 20% of the prevailing market price, essentially starting the low end oligo market. Just three or four years ago, it was a front page promotion on Invitrogen’s website to sell Illumina’s oligos through a production/shipping alliance, a cooperation previously unheard of in our field for such low price, non-commodity products. This move quite probably contributed to the decisions made by the more dedicated oligo company, IDT, to acquire local oligo production houses and move to the West coast (Allele opted out of such an acquisition and later did one of its own by taking over Orbigen and since moved into the viral systems and antibody fields). At that point when whole genome sequencing technologies were becoming mature and marketable, Illumina had performed brilliantly in out competing the previously dominant chip supplier Affymetrix, acquired Solexa, and quickly moved into the whole genome sequencing with Genome Analyzer and Genome Analyzer II, a move Affi’s management probably regretted not making.

In the years roughly around 2005-2007, Applied Biosystems, Inc. (ABI) was developing its own genome analysis equipment, the SOLiD system. It surely had a solid base to build on from its strong leadership in providing sequencer and analyzers for many years. Earlier in the year Invitrogen and ABI merged to form Life Technologies, pitching Invitrogen (now LifeTech) and Illumina in a collision course in battle for dominance in genomic analysis. In September, LifeTech brought suit against Illumina for patent infringement; in October Illumina countered with suits of its own. While the fight in court may be long and only sprinkled with occasional fireworks, the competition in the market could be fierce and should ultimately decide on whose technology is superior and offered at better prices. From the technical presentation made by sales teams to us during on site seminars, Solexa’s science sounded better. I was sitting next to Jay Flatley, CEO of Illumina at a San Diego biotech CEO dinner, and heard him predicting that the technology would advance and in a few years, one could get their own genome sequenced for about a thousand dollars, ~10% of the current cost! That’s simply innovation and competition at work. But watch out, a new wave of sequencing technologies based on single molecule capture might make the Illumina and LifeTech courtroom argument a moot point in the market.

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Friday, October 16th, 2009 State of Research

6 Comments to Competition from the Marketplace to the Courtroom

January 13, 2010

Illumina did it as promised, one step at a time: whole genome in 8 days under $10,000. Options to sequence 2 genomes at once for direct comparison (e.g. cancer vs normal tissues).

February 24, 2010

A new sequencing method uses chemical signals to measure the conductivity of electrons bound to single nucleosides to identify DNA bases as they travel through a nanopore. You can find out more about it by looking up Oxford Nanopore. Sounds like a quicker and cheaper way than the other methods.

April 29, 2010

Ion Personal Genome Machine (PGM) will be available for 1 to 2 hour runs at $500 per chip, on a $50,000 machine. 100 base-pair read lengths is ideal for the 100–200 bp-long DNA fragments extracted from even formalin-fixed paraffin-embedded tissues. Wow, the field moves fast!

July 5, 2010

Earlier this month, Illumina, Inc. (San Diego, CA) lowered the price of its genome sequencing service to under $19,500 from $48,000.

Other systems are going ever closer to $1,000 per genome.

July 31, 2010

Illumina Buys Helixis:
San Diego-based Illumina said today it has launched a new, real-time PCR system for the genetic analysis market, and also revealed that it acquired Carlsbad-based Helixis, a developer of those real-time PCR systems. The deal was worth $70M in cash and up to $35M in contingent payouts. Illumina said the acquisition actually occured on April 30th, with Helixis CEO Alex Dickinson becoming Senior Vice President PCR Solutions. Helixis was venture backed by Domain Associates and Okapi Venture Capital, and has raised somewhere north of $17M in funding. The acquisition appears to be the first out of the portfolio of Orange County-based venture firm Okapi Venture Capital.

Credit: and various news agencies

October 26, 2010

In the news: Helicos BioSciences Corp. reports that it has added two more defendants – Illumina Inc. and Life Technologies Corp. – to its lawsuit against Pacific BioSciences of California Inc. The suit now cites three companies for allegedly infringing on Helicos’ sequencing-by-synthesis patents, according to a Helicos press release.

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