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Illumina Creates Helix: Here's What It Is, And What It's Worth

Illumina Creates Helix: Here's What It Is, And What It's Worth
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The New York Times on Tuesday discussed the creation of Helix, a new gene sequencing venture. The creation of the new company has the backing and support of Illumina, Inc. (NASDAQ: ILMN), along with the investment firms Warburg Pincus and Sutter Hill Ventures.

According to the publication, the creation of Helix is "meant to help support the genetic analysis ecosystem" and will use Illumina's existing technology to "sequence customers' genetic information, and then place that data in the cloud and make it available to partners."

Mizuho: Helix A ‘Long-Term Play' On Consumer Genomics'

Peter Lawson of Mizuho Securities commented in a note on Tuesday that Helix represents a "long-term play" on consumer genomics and signals Illumina's commitment towards driving growth in the end-market outside of basic research.

"We see the creation of Helix dovetailing with the Illumina Accelerator, establishing an ecosystem and locking in future customers," Lawson wrote. "We estimate Illumina's current market opportunity for consumer genomics is relatively small ($100-$200 million), but with substantial long-term upside."

Lawson said Helix could capture a greater share of the expanding market by providing a "robust platform" to both industry and end-user consumers. The analyst added that most of the consumer base right now is focused on arrays, so pushing the uptake of sequencing would be a "key and attainable goal."

The analyst also noted that the company will consolidate Helix in its financial statements, with the pro-rata impact attributable to outside investors reflected in a non-controlling interest line item in the income statement.

Finally, the announcement isn't expected to impact Illumina's 2015 guidance and will be approximately $0.10 dilutive to 2016 earnings.

Lawson maintained a Buy rating on shares of Illumina with a price target raised to $250 from a previous $240.

Latest Ratings for ILMN

Oct 2016CitigroupMaintainsNeutral
Oct 2016BarclaysMaintainsEqual-Weight
Oct 2016Janney CapitalDowngradesNeutralSell

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