A MegaTrend Stock & the Human Genome are Related (ILMN)

Illumina Democratizes the Power of DNA Sequencing

In 1990, an international effort, known as the Human Genome Project, began to sequence the entire human genome. This was a major effort because 30 years ago the technologies that were available to researchers were limited in power and scope. Other simpler species had their genomes sequenced, but given the complexity, it took until 2003 to complete the work. It recorded 3 billion DNA bases, representing 92% of the entire genome.

This was a groundbreaking effort.

 

 

Source: The DNA Universe

 

You see, having a complete, gap-free sequence of our DNA is critical for understanding human genomic variation and the genetic contributions to certain diseases. Having this map meant we could explore new treatments and therapies for diseases and even learn how to effectively create gene therapies and treatments that worked alongside our own immune systems.

By creating these new types of therapies, it meant less drugs were needed so there were fewer side effects, yet efficacy increased. We’re still in the early stages relatively speaking, but the results are very impressive.

 

Illumina on the Scene

When Illumina (NASDAQ: ILMN) launched in 1998, developing what is now known as its BeadArray Technology for sequencing DNA, it wasn’t trying to reinvent the work that the Human Genome Project was doing.

 

 

Its founders saw the potential for using genome testing to open up new possibilities for drug companies, biotechs, and many other sectors beyond human healthcare.

The early 2000s were a heyday for research groups that began to go public with their proprietary genome testing technologies, and ILMN was already expanding its footprint in the business with the acquisition Cambridge, UK-based Solexa in 2007. By this point, sequencing the genome cost around $1 million. By 2009, it was $48,000. By 2011, it was $4,000, and in 2014, it cost $1,000.

In just seven years, the cost of sequencing the human genome dropped 3 orders of magnitude.

 

Genomic Sequencing Becomes Big Business

That meant it made more sense for companies, labs, and biotechs to simply buy the equipment and run tests themselves, rather than send out to ILMN and others to do the work. This was like the invention of the printing press. It wasn’t just the technical accomplishment, it was the massive implications for the new technology.

 

Source: Business Weekly

 

ILMN already had its machines ready for delivery. In 2014, ILMN had about 70% market share for genome sequencing, either doing the work or selling the equipment. The market for sequencing was growing as fast the technology. New players were coming to market, but ILMN continued to be the leader in a rapidly expanding field.

 

Source: Semantic Scholar

 

Taking Stock of ILMN

Today, ILMN has a $38 billion market cap and is the industry leader in genomic testing equipment, as well as testing. It has also differentiated its business over the years into other diagnostic sectors and made numerous acquisitions to bolster its products, as well as find new opportunities. Take a look at this chart.

 

 

In the past two decades or so, ILMN stock has risen more than 24,000%. That’s nearly 1,200% annually. Any company that can grow at this pace for so long is certainly what it means to be a MegaTrend stock.

That’s why right now is so exciting. ILMN has taken a hit along with the rest of market. When the bull market was going, ILMN was leading the charge. Now, the market is readjusting expectations. It does this by wiping the slate clean – good and bad stocks together.

Then, it starts to look for the quality companies and what their future holds. In the case of ILMN, it will be back strongly when this selling ends. That’s why it’s a great opportunity to start slowing accumulating shares now. There’s no reason to try to pick the bottom. The worst of the downside is over, and it won’t be this kind of bargain for many years to come.

 

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