Diamond Hill Capital Management, LLC - Mid Cap Strategy on Illumina, Inc.
Thesis
Illumina is the leading producer of next-generation sequencing systems used to sequence DNA for research and increasingly for cancer diagnosis and treatment. Shares strengthened after the company reported better-than-expected clinical growth. Diamond Hill also viewed the launch of Roche's comparable product as underwhelming, which reduced near-term competitive concerns and reinforced Illumina's position in sequencing.
“Shares rose during the quarter after better-than-expected clinical growth, while competitor Roche's comparable product launch appeared underwhelming.”
Key risks
- Competition from alternative sequencing products, including Roche's comparable offering.