Roche sets gene-sequencing record. It’s a challenge for Illumina.

Since Illumina systems dominate gene sequencing in research labs and the clinic, Roche will need to demonstrate impressive speed, accuracy and economy in its new products to make a difference in Illumina’s $4 billion in annual sales. News of Broad’s speed record coincides with this week’s genomics conference, where sequencing competitors are showcasing their latest technologies.

Large-scale researchers said they had demonstrated the feasibility of same-day reporting of clinically relevant gene variants to people caring for newborns in intensive care. This is approaching the turnaround time of other clinical laboratory tests. Rapid sequencing could also make a difference in treating infections.

Compared to the decade it took to sequence the first human genome, the latest result resembles the way top climbers currently scale Mount Everest. Instead of spending weeks setting up camps higher and higher on the mountain, they quickly ascend in a day.

Even Illumina had compliments.

“The significant investment companies are making as they rank speaks to the continued strength and potential of the market,” an Illumina spokesperson told Barron’s. “It is an exciting moment for the entire industry that we are seeing an improvement in the pace of rankings.”

In its bid for the sequencing market, Roche this year introduced a new sequencing chemistry it calls SBX that can read longer lengths of DNA than Illumina’s established SBS technology. This helps Roche produce more data faster.

SBX will be used in Roche’s new high-end sequencing system, Axelios, which will be available in the first half of 2026, Guggenheim Partners’ Subbu Nambi said in a report released Wednesday from the American Society of Human Genetics meeting in Boston.

To gain insight into Roche’s new offerings, Guggenheim heard from Christopher Mason, a professor of computational genomics at Weill Cornell Medicine in New York who had early access to the systems. According to Guggenheim’s briefing report, Roche products appear to be able to compete with Illumina’s products in terms of accuracy as well as superior speed. Roche also seems willing to underprice Illumina.

Roche prices Axelios at $750,000; Illumina’s best sequencer costs about $1 million.

It’s been four years of heartbreak for investors since Illumina shares peaked in the biotech bubbles of the Covid-19 era. It has fallen from $500 to $96 since mid-2021. Guggenheim analyst Nambi rates it a Buy with a target price of $114.

Illumina told Barron’s that it will take considerable time for Roche to produce evidence showing its new technology can deliver “accuracy, quality, consistency and total end-to-end cost.”

Research laboratories like the Broad are testing new systems from each vendor, but the larger market of clinical laboratories has been slower to adopt the technology. Illumina, which spends $1 billion annually on research and development, is not standing still.

At this week’s ASHG meeting, a new chemistry was demonstrated that simultaneously reads DNA and molecular tags that turn genes on and off to determine disease or health. Illumina enjoys a competitive moat, Guggenheim said.

But Mason thinks Roche can overcome this hurdle. According to the Guggenheim professor, if Illumina had a clear direct competitor, that threat would be Roche. Mason expects Illumina and Roche to become the largest clinical sequencing suppliers in the next two to three years.

Write to Bill Alpert at william.alpert@barrons.com