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Sunday, May 19, 2024

Illumina Software Buy Estimated At $100 Million

Genomics specialist Illumina Inc. has expanded its capabilities by acquiring BlueBee, a Dutch company offering cloud-based genomics software.

The San Diego company announced the acquisition on June 17 and compared the transaction to its 2018 acquisition of Edico Genome. Illumina (Nasdaq: ILMN) paid $100 million for Edico, which produces specialized microchips for genetic sequencing work.

Analyst Puneet Souda of SVB Leerink said in a research note that the BlueBee acquisition was on the same scale as the Edico deal, and could be considered in the $100 million range.

Souda said he expects more acquisitions to come.

Genomics is a data intensive endeavor, with scientists having to handle very large computer files. Illumina has more than 15,000 sequencing systems producing data.

10 Years in the Making

BlueBee had been developing its software for 10 years. The acquired firm had 35 employees, and it had already been serving several Illumina customers. Its software products are secure for medical use and comply with all necessary regulations. They offer customized data analysis workflows, data management and analytics.

Susan Tousi, Illumina’s senior vice president of product development, took the lead on the acquisition. It augments the already extensive software capabilities that Illumina offers its customers. The addition of BlueBee, Tousi said, accelerates Illumina’s capabilities by several years.

The acquisition is expected to drive down the cost of storing, sharing and managing enormous volumes of data, Illumina said. The BlueBee product also promises to make the process of sequencing a genome more user-friendly.

In an effort to offer value to customers, Illumina said it is both buying new technology and developing it internally. In separate news, the company announced July 8 that it was introducing software — called its TruSight Software Suite — for whole genome sequencing. Developed in partnership with Mayo Clinic, the software enables labs to quickly interpret whole genome sequencing into meaningful results.

A Competitive Advantage

Souda, the analyst, hinted there may be more acquisitions to come.

“We expect more of these technology deals and any other asset that accelerates adoption of sequencing to be on the table — with a focus on automation, sample prep and library prep,” he wrote.

“… The deal is consistent with past emphasis on information technology and software improvements. ILMN management has increasingly turned to technology based acquisitions that can be integrated into their current ecosystem and improve existing IT infrastructure,” he continued. “More seamless data acquisition, data management and secondary analysis widens ILMN’s competitive moat, in our view. In addition, we believe customers — especially in clinical diagnostics — are increasingly asking for quicker data generation and analysis due to the turnaround times required in the clinical setting.”

Tousi said the BlueBee deal came together quickly. The two companies began collaborating on projects six months ago. Talks quickly turned to acquisition.

Despite the fact that the deal took place across different geographies and time zones, and took place during a pandemic, it went well, the executive said.

Hans Cobben, CEO of BlueBee, will run Illumina’s software arm.

The genomics market is experiencing a compound annual growth rate of 7.7%, according to Grand View Research Inc. San Francisco-based Grand View estimates the market will be worth $31.1 billion by 2027. Fast growth is expected in the consumables and reagents deliverable segment. Also expected to grow at a fast pace is the computational services deliverable segment.

Illumina has 7,700 employees worldwide and had $3.5 billion in revenue last year. First-quarter revenue was $859 million. As of March 29 it had $2 billion in cash and cash equivalents.


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