Illumina, the leading provider of high throughput gene sequencing technology, announced Monday that it has agreed to purchase Verinata Health, who provide medical tests to determine fetal chromosomal abnormalities using a pregnant women's blood rather than invasive amniocentesis.
Maternal blood based prenatal genetic tests rely on high throughput DNA sequencing to detect abnormalities in the fetal DNA, so Verinata Health's test, as well as its competitors' versions, extensively use the Illumina system. In fact, Sequenom, the largest company supplying these tests, entered into a collaboration agreement with Illumina in July 2011 to develop these tests. A few months later Sequenom released the first of these type of tests on the market. Sequenom also claims to have the predominate patent position in the field and has pending lawsuits against the other providers of these test kits, including Verinata. I suppose it is not surprising then that Sequenom's CEO is 'puzzled' by Illumina's move.
It still remains to be seen how the five companies competing in this developing market segment will fare. The maternal-blood prenatal DNA test kits have only been available on the market since the end of 2011, and, with the exception of Sequenom, the other companies offering these diagnostics were small start-up ventures. With the Illumina announcement, however, Sequenom now has an established, financially strong competitor. A fact its shareholders seemed to have noticed.