Illumina (ILMN) has become a rising star in the complex analysis of gene variation, and the stock shows it. Since early January the shares have risen some 50%, to 21. The company develops research tools for genotyping and gene expression, which provide information to improve drugs and other therapies. The tools help Big Pharma and academic labs process the billions of tests necessary to convert raw genetic data into medically valuable info, not only to improve drugs but also to customize diagnoses and treatment, says Jeffrey Loo of Standard & Poor's (MHP). He sees a 60% jump in Illumina's 2006 sales, to $118 million, up from 2005's $73 million. Understanding genetic changes is critical to developing personalized medicine, says Loo. Illumina is one of five U.S. players in a global project to create a map of genetic variations for disease-related research. Genotyping, the fastest-growing sector of gene analysis, is where "we are winning more customers than our rivals," says Illumina CEO Jay Flatley. According to John Sullivan of Leerink Swann, who rates the stock "outperform," Illumina's new product, 500K BeadChip, to be launched this year, will make the company more competitive with DNA chip technology leader Affymetrix (AFFX).
Note: Unless otherwise noted, neither the sources cited in Inside Wall Street nor their firms hold positions in the stocks under discussion. Similarly, they have no investment banking or other financial relationships with them.
By Gene G. Marcial