(Updates with closing share price in eighth paragraph.)
By Michelle Fay Cortez
Nov. 2 (Bloomberg) -- Life Technologies Corp.’s Chief Executive Officer Greg Lucier said his company will take the top spot in genetic sequencing next year ahead of current industry leader Illumina Inc.
The Carlsbad, California-based maker of the Ion Torrent line of DNA sequencers bought Compendia Bioscience Inc. last month and Navigenics Inc. and Pinpoint Genomics in July. The company is likely to acquire more companies to help doctors connect gene mutations with available treatments as it competes with San Diego-based Illumina and Roche Holding AG in the $1.5 billion to $2 billion genetic sequencing market.
“We are very confident we are going to be the No. 1 genetic sequencing company in the world in 2013, not only for the next generation technology, the Ion Torrent, but when you look across multiple generations,” Lucier said.
Gene sequencers provide a blueprint of a person’s DNA, information that may be used to diagnose disease, identify the risks of certain conditions or better target medicines. New machines have reduced the time and cost to analyze a patient’s genes. Life intends to become the sales leader in the future because its technology will be difficult for competitors to beat, Lucier said in a telephone interview.
Lucier’s goals may be harder to attain than he thinks, said Ross Muken, an analyst at ISI Group LLC in New York. While Illumina will remain the dominant company in genetic sequencing, Life has become a stronger rival, he said.
“They have done a much better job with the business in the context of making Ion Torrent more competitive,” Muken said of Life in a telephone interview. “I still don’t see them unseating Illumina. Generally, we still think Illumina has a lead on accuracy and ease of use.”
History may also play a role, Muken said. Because many researchers have done their sequencing work with Illumina technology, they may stick with the company, he said. Muken estimated that Illumina has 60 percent of the next-generation market, while Life has 20 percent to 25 percent.
Life fell 3.3 percent to $48.63 at the close in New York. The company’s shares have increased 25 percent this year.
First, though, the industry needs to prepare for the $1.2 trillion in looming U.S. government spending cuts, known as sequestration, that’s set to start in January, Lucier said. The National Institutes of Health, which provides medical research grants spent on sequencing products and services, would lose $2.5 billion if Congress doesn’t block the reduction.
The potential cuts already have researchers reducing their spending, he said.
“It’s not a catastrophe,” Lucier said. “We have adjusted our cost structure to deal with that, and if it doesn’t happen, our profitability will be even better.”