"This agreement with Verinata demonstrates Illumina's commitment todeveloping innovative diagnostic solutions and providing our partnerswith the most advanced technologies for improved patient care," said Jay Flatley, president and CEO of Illumina. "Building on the recent acquisition of
BlueGnome Ltd. and our expertise in next-generation sequencing, this announcement further establishes Illumina as a leader in reproductive health."
Available through a physician, the verifi test analyzes cell-free fetalDNA naturally found in a pregnant woman's blood to look for missing orextra copies of chromosomes, or aneuploidies. Specifically,the test detects Down syndrome (trisomy 21 or T21), Edwards syndrome(trisomy 18 or T18) and Patau syndrome (trisomy 13 or T13). Reportedly, it is thefirst non-invasive prenatal test that offers the option to includeevaluation of sex chromosome aneuploidies, such as Turner syndrome(Monosomy X), Triple X (XXX), Klinefelter syndrome (XXY) and Jacobssyndrome (XYY), which are the most common fetal sex chromosome abnormalities.
According to Illumina, compared to other testing options, the verifi prenatal test providesmore definitive information than risk score-based tests (traditionalprotein serum screens), which calculate probabilities, and does notcarry the risk of complications that an invasive procedure, such as anamniocentesis, can have.
As Illumina puts it, "The robust technology behind the verifi testleverages the power of massively parallel next-generation sequencingwith a highly optimized algorithm to provide accurate aneuploidydetection, with the ability to look across the entire genome"
"Together, Illuminaand Verinata are well-suited to drive the adoption of the non-invasiveprenatal testing market. With approximately 500,000 high-riskpregnancies annually in the United States and an estimated four million pregnancies in total, there is a clear need for such tests," said Dr. Jeffrey Bird, executive chairman and CEO of Verinata Health. "Given the recent American College of Obstetrics and Gynecology and Society of Maternal and Fetal Medicinejoint opinion that recommended cell-free DNA prenatal testing asa first or second trimester option for women at increased risk ofaneuploidy, we believe more physicians will be adopting NIPT."
The verifi test will continue to be offered through Verinata'sCLIA-certified and CAP-accredited laboratory, which will continue to actas a reference laboratory to gather some of the necessary clinical datafor future regulatory submissions.
According to Greg Heath, senior vice president and general manager of Illumina's Diagnostics business, "Thesynergies between Verinata's and Illumina's capabilities, combined withthe expertise in reproductive health gained from the acquisition ofBlueGnome, enable Illuminato provide a compelling portfolio of offerings across the spectrum ofreproductive health."
Based on the American College of Obstetrics and Gynecology and Society of Maternal and Fetal Medicine guidelines for high-risk pregnancies in the United States, the addressable NIPT market is estimated to be more than $600 millionin 2013. The total domestic market is estimated to grow to between 1.5 million and 2million tests performed annually within the next five years.
The transaction is expected to be approximately $0.20 dilutive to Illumina'snon-GAAP earnings per share in 2013 before turning accretivein 2014 and beyond.
Zacks Investment Research, in issuing a research note about the acquisition, points out that Illumina "continues to demonstrate its strength in the genotypingmarket with its high-margin next-generation sequencing platform" despite ongoing difficulties in obtaining research funding at many companies and institutions that would use Illumina's products. Relatively undeterred by this hiccup in the economies of research efforts and seeking growth all the same, Illumina has, Zacks notes "made several acquisitions and enteredinto partnerships to tap this growing [genotyping] market."
In terms of acquisitions, Zacks pointed to the same one Illumina did itself in announcing the Verinata deal: the purchase of BlueGnome. As far as other deals, Zacks notes: "In the same month [as the BlueGnome acquisition], the company enteredinto a strategic alliance with Partners HealthCare, a healthcare systemdeveloped by the Brigham and Women's Hospital, and Massachusetts GeneralHospital in order to develop improved infrastructure and networkingtools for the interpretation and reporting of genetic sequencing data.The company also entered into a partnership with Siemens HealthcareDiagnostics to use the MiSeq platform for Siemens' molecular HIV tests.Furthermore, the company expanded its Genome Network with the inclusionof the British Columbia Cancer Agency to its existing list."
