I think we're seeing a whole new Illumina strategy for defending the mid-market from Element Biosciences competition. I for one was thinking too narrowly to see this - figured it was all about Aviti vs NextSeq. But I think we're starting to see a clever three-pronged Illumina strategy: (1) Times are hard, why buy a mid instrument for $400K when you can just skip that and send your samples out to someone with an X? (2) High throughput is where it's at, here's a cheap NovaSeq X, why not stretch a little for that and be able to hang with the cool kids? (3) Have you seen our new MiSeq i100? Here take this Lego one. It's just $100K, you can most of your stuff with that, and just send out for the big stuff. Sure, kills NextSeq sales too, but that's easy pain for Illumina to bear, but existential for Element. Here's Illumina CFO Ankur Dhingra spelling it out for Wolfe's Doug Schenkel: "...customers, because of the macro [economic/grant] issues, have been transitioning their sample volume to high throughput. And a lot of our mid throughput customers who are constrained by that macro environment are resorting to sending their samples to either core labs or other sequencing providers." "...the constrained environment is making people take decisions on what are they going to invest in their lab or until money frees up, they're going to take advantage of the lower high throughput [X-based sequencing as a service] pricing that is available externally." "I do think there are additional two factors that are coming our way from an Illumina perspective. We have said we will be launching a slightly lower throughput version of NovaSeq X with a single flow cell. And that is at a price point which is well below 1 million. So, there is a potential that some of our mid throughput customers may see some value there. And also, the higher end of the new MiSeq i100 that we have launched has capabilities that can seep into some of the mid throughput kind of requirements as well. So, it's [Element?😳] going to get squeezed from a little bit from both the directions as well."
It’s a good strategy for North America, but the bigger threat is outside North America where Complete Genomics has a bigger piece of the pie, and in some cases the larger proportion of new wins with its selection of options.
Tayyaba Toseef
3mo
Do you have any insights on consumable costs?
I would add to it the data analysis/interpretation ecosystem. Thinking beyond just the boxes. Not bad, Illumina
Chris Gaetani
3mo
I really enjoyed reading this.... not because I root for one side or the other but because the dynamic is so interesting. I think Illumina would be just fine taking a step back on NextSeq sales for a while because they have the platforms and flexibility to serve clients while they wait the macro issues out.
I partially agree with this perspective. Illumina had already been preparing the ground since the launch of the NovaSeq 6000, selling high-demand machines in various locations that did not have enough demand to run full routines. With the launch of the NovaSeq X, this sales strategy intensified, knowing that patent expiration in 2023 was imminent. However, I believe the sales performance of this new equipment did not meet expectations, given the revenue drop in the last semester. This attempt to flood the market with larger machines and encourage outsourcing began even before new competitors entered the market. The MiSeq has needed a revamp for years. In my opinion, it was one of the most significant devices launched in the NGS market—it was the beginning of everything. I was surprised they launched a new NextSeq first. The current release of the new MiSeq should have been ready a long time ago, just waiting for the right moment. Here, I fully agree with you: the timing was perfect. They not only don’t need but also have no reason to continue investing in mid-range machines. The slogan “The era of the genome has begun” started with the pure marketing of the NovaSeq X, already paving the way to phase out mid-range machines.
Jim Nathlich
2mo
Buy for super hi-end or very low end...everything else is 'cloud sequencing'?
Mohamed K. Zain
3mo
Eat yourself better than someone else
Director @ UC Berkeley- QB3 Genomics; Sequencing and Operations
3moI’ll wait to see on your point 2. I’d still outsource over the capex spend and running costs. Illumina still has some challenges to overcome in the technology with the push to uHT sequencing but the i100 has addressed a lot of that. I’ll spare everyone the details. As a NextSeq owner I’ll run it into the ground and just negotiate prices for what I perceive the data is worth. I want my non pattern flowcell option on a midsize box back! Problem solved for me. So I hope a NextSeq reboot helps me. Or a small X that can give me patterned and non? Yeah, I’d buy that.