Roche (RHHBY.US) launches the Axelios gene sequencer in an attempt to challenge Illumina (ILMN.US)'s dominant market position.

Swiss pharmaceutical and diagnostic giant Roche (RHHBY.US) officially launched the highly anticipated Axelios gene sequencing instrument this Monday, aiming to challenge the leading position of American company Illumina (ILMN.US) in the next-generation gene sequencing (NGS) field. It is understood that over ten years ago, Roche once made a hostile takeover bid of $6.8 billion for Illumina, which ultimately ended in failure. This new device will initially be targeted at research and academic institutions. The Axelios platform aims to achieve rapid reading and analysis of large-scale DNA, with applications covering various fields such as disease research and drug development. Unlike traditional short-read long sequencing systems, Axelios converts DNA or RNA into longer chain molecules that are easier to read, and then passes them through micro-nanopores on a reusable chip to generate gene data for analysis almost in real-time. Incrementally capturing market share Analysts believe that Roche's entry is more likely to be an incremental process of capturing market share rather than a rapid disruption of the approximately $7.3 billion market. Illumina still currently holds a leading position, with an expected market share of around 70% in NGS systems. Roche stated that the sales target for the first year is approximately 100 devices, which will lay the foundation for building a key business line in the future, with the long-term potential to achieve annual sales exceeding CHF 1 billion (approximately $1.1 billion). Vontobel analyst Stefan Schneider stated before the launch that with Roche's mature commercial scale, this target is "highly probable" to be achieved. However, he also pointed out that the launch of diagnostic products typically takes longer than drug promotion, mainly due to the impact of institutional tender processes. Illumina's NovaSeq X series devices for similar large-scale sequencing work are priced at approximately $985,000 to $1.25 million, while Roche's Axelios is priced at $750,000 in the US market, making it competitive. Analysts also pointed out that the initial purchase price of the instrument is not key, and the ongoing expenses for consumables (such as chemicals) are the core cost, which may accumulate to millions of dollars over the entire period of use. To accelerate market adoption, Roche has partnered with 10x Genomics (TXG.US) and Alphabet Inc. Class C (GOOGL.US) DeepVariant for data analysis, and has received early platform validation support from Broad Clinical Labs and the Hartwig Medical Foundation.