Shares of Illumina, Inc. (NASDAQ:ILMN), the leading provider of DNA sequencing technology to academic and commercial laboratories, fell almost 30% after reporting disappointing third quarter financial results. The shortfall was caused primarily by weak high-throughput instrument sales in North America and general weakness in Europe. Illumina’s growth is very much driven by new product introductions, and in 2016 sales suffered as the high- throughput instrument line reached the end of its life cycle. In early 2017, Illumina launched a new high- throughput sequencing platform that should re-accelerate growth. In addition, Grail, the start-up funded by Illumina which is developing a blood-based cancer screening test, announced it received capital commitments of $1 billion and would become one of Illumina’s largest customers over time. We continue to believe Illumina has a long runway for growth driven by increasing adoption of DNA sequencing in clinical markets such as cancer screening, diagnosis, and treatment.
From Baron Funds' Fifth Avenue Growth Fund fourth quarter 2016 commentary.
