Our Looker analytics at Stream by AlphaSense pointed us to the top transcripts of last week. Interestingly, two are about Illumina Inc. (ILMN) with one expert bullish and one expert bearish. So why are ILMN transcripts trending on Stream? ILMN recently announced disappointing results for Q2 2022 and blamed delays in customer lab expansion and COVID disruption in China as the major drivers of their shortcomings.

Diving deeper into the transcripts, we can see that ILMN and Pacific Biosciences (PACB) are clashing as they make advances in long-read sequencing innovations. But what exactly is long-read? Well, long-read genome sequencing is necessary to analyze challenging genomes that contain stretches of highly repetitive elements as opposed to short-read sequencing. Wow, that was a long read!

You can gain access to these expert call transcripts and more with a free trial at Stream. Here are the top six transcripts by unique users and engagement and more about ILMN below:

Top Six Expert Call Transcripts Last Week

Top 3 by unique users

• Thermo Fisher Scientific Inc (TMO): Customer Believes the Analytical Segment Has Strong Barriers to Entry (read full transcript)

“Fifteen years ago, if you talk about [Thermo Fisher Vanquish] HPLC, nobody talked about Thermo Fisher. Now, they already have their significant market share. This is rather growing, I think, and they are also quite innovative. I think from a customer point of view and from what I see and I experience, I would say it pays off.

My customer experience with an acquisition that Thermo Fisher did, I did not see an interruption of services or of service quality. It was going very smoothly, I think. Maybe that’s because they do so many acquisitions.”

-Director of Site Quality, Recipharm (Prior)

• Intuitive Surgical Inc (ISRG): Surgeon Thinks Cost Is a Big Barrier to Adoption of Robotic Surgery in Developing Countries (read full transcript)

“Now, there are various different parameters which need to be considered before subjecting a patient for open versus laparoscopic or robotic surgeries. One important patient concern would be consideration of the cost-effectiveness…undoubtedly open surgeries might be cheaper for the patient as compared to laparoscopic or robotic surgeries…

In some cases, like going down deep into the pelvic cavity and resecting a particular tumor., I would be more comfortable entering the paved cavity using a minimally invasive platform. Especially robotic surgery, because of its distinct advantages of giving us more dexterity.”

-Consultant Cancer and Robotic Surgeon, Cancer Care Clinic

• Illumina Inc (ILMN): Customer Believes ILMN Remains the Best in Next-Generation Sequencing (read full transcript)

Deeper dive below

Top 3 by engagement per unique user

• Aurora Cannabis Inc (ACB): Former ERP Data Specialist Thinks That Big Cannabis Brands Could Be Helped Further by Connecting With the Cannabis Culture (read full transcript)

“There was change after that first round of layoffs. I feel at that time when that first round happened, it was, I think, due to just pressure from investors who wanted to see a return. We were legal in 2018, and then the first round of layoffs happened about two years later. It happened in about 2020 but before COVID. I think around that time is when investors are like, ‘Okay, it’s been two years…’ That’s the first time they announced that they were going to go with a stock split. Shortly thereafter was the layoff.

That’s when the CEO left, and then there were just a lot of higher ups that left. That’s when they had an interim CEO for a bit... I haven’t seen any major considerable turnover in terms of a management perspective, but the recent announcement of the fact that other facilities are going to be closing within the next few months or so, just came out not too long ago.”

-ERP Data Specialist, Aurora Cannabis Inc (Prior)

• Bio-Rad Laboratories Inc (BIO): Former EVP Sees Ongoing Supply Chain Challenges and Is Bullish on ddPCR (read full transcript)

“Things like wastewater treatment, that’s becoming a very big business. As it becomes more and more commonplace around the world, that’s going to boom. That’s going to be a hundred times, a thousand times bigger than it is today.

Companies like Bio-Rad, it’s like ABI. In the early days of PCR, they got a foothold and made it very difficult for other companies to enter. I think that’s the position that Bio-Rad is in, being viewed as the leader. The complexity, it’s not an easy product to do. That, in and of itself, will keep some companies out of the space.”

-Executive Vice President, Global Supply Chain, Bio-Rad Laboratories (Prior)

• Illumina Inc (ILMN): Former Sr. Segment Specialist Sees ILMN Remaining Well-Positioned but With an Increased Risk of Pricing Pressure (read full transcript)

Deeper dive below

Increasing Focus in the Long-Read Sequencing Market

Long-read sequencing is a big market and PACB has seen success with it

“There’s definite areas where long-read is necessary. PacBio has had a lot of success in the genetic disease arena with long-read, where they have a key advantage. That’s a really big, big market. Particularly, companies are looking to go into consumer genomics and things like that and population health, that’s going to be very, very important.”

– Senior Pharmaceutical Segment Business Specialist, Illumina (Prior)

Long-read is up to three times the cost of short-read (that’s a long receipt!)

“I can say that [the market] is kind of saturated for short-read sequencing now… They are doing it regularly but there are occasions which you cannot resolve the short-read sequencing. That is where you need long-read sequencing…

Definitely, we need to have a long-read sequencing approach in those occasions but still the cost of doing it looks a little higher for the long-read sequencing compared to the short-read sequencing. It is definitely needed which cannot be done with short-read sequencing.

I can say [long-read] is at least double the expense [of short-read.] In some cases, 3X to the short-read sequencing than the cost of long-read. Definitely, the number is increasing as the technology improves over time. That may go down and it comes to at least maybe 50% higher than short-read sequencing. Still, that is the worst because that is not possible with the short-read sequencing to do some certain cases.”

–Research Associate, Brown University

PACB claims ILMN’s long read technology will be a bootstrap of their short-read technology

“[Christian Henry, PACB CEO] feels like even Ilumina’s long-read is going to be a bootstrap and a stitching together of short strands of DNA. To be able to get their like 10,000 base pairs is where PacBio is able to get up to 50,000 base pairs. Illumina is going to have gaps because of that delta with things like tandem repeats and epigenetic changes such as methylation.

Illumina does need a long-read solution and it looks like they’re going to have to build it themselves. What PacBio was saying is, regardless of what they do to build it, it’s still based on their short-read technology and it’s a bootstrap again. [ILMN] does not seem to be overly concerned because I think that they’ll be able to demonstrate superior performance in that arena for some time. Now, you look at the overall market, short-read versus long-read, and short-read is still 80% of the market.”

– Senior Pharmaceutical Segment Business Specialist, Illumina (Prior)

ILMN’s Brand Recognition Approach

Expert One believes that ILMN is adaptable and a leader in the industry

“Clearly, Illumina is in the top position in the industry. I don’t know about any other technology which is going to compete with that right now…The advantage of Illumina is that it is a known system by the right people. Definitely, if newer technology comes out, [ILMN] will adapt quicker to the new technology and compared to new companies which are coming up because they are the leaders in the industry.”

–Research Associate at Brown University

While Expert Two claims pharmaceuticals see ILMN as just a razor blade provider

“I think scalability is extremely important and being able to provide high-throughput is something that these pharma companies are looking for to be able to get through sample analysis in a reasonable amount of time. They want a high degree of automation…

I think that Illumina has really ramped up its business development efforts relative to establishing partnerships. They’ve been a little bit slow in doing that because pharma companies really see Illumina as an instrument and platform provider. Not so much as a reagent company or a diagnostic test provider. Their flagship product, TSO500, that provides comprehensive genomic profiling, still doesn’t have FDA clearance to my knowledge…

I think that they’re trying to turn the corner on not only being a razor provider, as in the instruments but also being able to provide the blades of the tests. Just as they’ve seen it in the academic research area where they’ve done really, really well with the razor blades. They see that as an opportunity with pharma. I think that when you look at the GRAIL acquisition, that speaks to that.

– Senior Pharmaceutical Segment Business Specialist, Illumina (Prior)

But Expert One believes ILMN’s brand value has given it a razor sharp edge

“I always look for that accuracy and the price. We may not know in the next five years whether Illumina will stay competitive in the field or not. If it is competitive, definitely because of the name branding of the Illumina. If there is another company which can compete and use a better and cheaper way of approaching it, definitely, we’ll go for the other one not like because you cannot predict. It is a fast-moving industry, in terms of sequencing technology. If they come up competitive in the field, definitely because of the brand value we’ll go for Illumina.”

–Research Associate, Brown University

However both agree that ILMN will be leveraging its brand recognition in the arena

“I think, on one hand, [ILMN] is concerned. They know they’ve got an uphill climb. On the other hand, in their market share, I think they feel they have enough mindshare of the customer base to give them an opportunity. Perception is reality. While PacBio’s going to be talking about facts and data, Illumina’s going to be taking more of a marketing and brand recognition approach to being able to capture a part of that market. Now, the proof is really in the pudding when the rubber hits the road from scientific functionality. If there are gaps in that, PacBio is going to capitalize on those.”

– Senior Pharmaceutical Segment Business Specialist, Illumina (Prior)

Shortcomings and Challenges Ahead for ILMN

ILMN made an unsuccessful attempt to buy PACB to save development costs

“Obviously, there is a strong interest in long-read. It’s more efficient. You’re getting a broader perspective of the genome with less replication. We saw the importance of it to Illumina when they tried to buy PacBio. They went out there with a $1.2 billion offer where PacBio was doing about 10% of that in revenue. They really went out and made a big bid for it because it would have saved them a tremendous amount of money by going out and getting the market leader in long-read. Even though they weren’t first to market the long-read, they’ve become the market leader with long-read.”

– Senior Pharmaceutical Segment Business Specialist, Illumina (Prior)

ILMN expects to bring a high quality long read product even if its bootstrapped 

“I think that based on Illumina’s track record of what they’ve brought to the market, they’re going to be able to convince customers. I know we’re going to bring a high-quality product to the market. Now, it’s just the reinvention of what they’ve got already in their short-read. I think they’re expecting Illumina to execute. Frankly, you don’t expect someone like PacBio to say that they’re scared and worried, but it obviously isn’t positive for them that Illumina is going in the long-read on their own.”

– Senior Pharmaceutical Segment Business Specialist, Illumina (Prior)

But ILMN will have to iron out some flaws in its ordering system first

“Main thing is their ordering system is really haphazardous. It is not at all clear. You cannot find the right catalog number which matches the right chemistry, what you want to use, or what simple system. You always need to contact customer care and say, “Okay, this is the one that I would like to use, what do I need to order and how much I need to order.

Those kinds of systems are really not at all good compared to the regular other, that is the molecular biology industry other than ordering. This is a main complaint, but I know that they are very good customer care to contact them. They are ready to help you. This is our main complaint with Illumina like ordering systems under clear differentiation now which kit is needed for which situation and what is to be ordered.”

–Research Associate, Brown University

Given its Q2 earnings and competition with PACB, ILMN has a long road ahead of itself. But bootstraps and jean sequin-ing really do go well together so maybe ILMN’s bootstrap gene sequencing will too.

Stay tuned for next week’s Healthcare Weekly update here at Stream by AlphaSense!

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