Laboratory Corporation of America Holdings (NYSE: LH) on Tuesday announced a non-invasive prenatal test for chromosome abnormalities in fetuses using a single draw of blood from the mother, using genetic technology from San Diego’s Illumina Corp. (Nasdaq: ILMN).
LabCorp did not predict what revenues the new test might generate, but the announcement was enough to prompt the Wedbush securities firm to upgrade its rating on Illumina from “neutral” to “outperform.” Wedbush set a one-year $200 price target for the company, ahead of the current consensus estimate of $195.28.
Between the market’s close on Tuesday and the first hour of trading on Wall Street on Wednesday, Illumina stock jumped nearly 3 percent, rising from $170.49 to a peak of $175.50, followed by a slight pullback.
In the meantime, Forbes Magazine on Wednesday released a glowing profile of the company, headlined “Flatley's Law: How One Company is Creating Medicine’s Genetic Revolution.” Forbes said one indication of how fast the revolution is moving is that the market for DNA-testing has been moving far faster than Moore’s Law, which correctly predicted the exponential growth of semiconductors during the early days of personal computing.
“The only thing more extraordinary than the growth rate of the sequencing revolution is that the beneficiary is a single company, Illumina of San Diego, and most of the credit for the rate of change can be laid at the feet of one entrepreneur, Chief Executive Jay Flatley,” the article said. “Thanks largely to Flatley’s leadership, Illumina emerged as the dominant maker of DNA sequencers eight years ago and has maintained 80% market share despite an assault by several well-funded competitors.”
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