Illumina is an established player in the field, providing one of the most widely-used second-generation sequencing platforms (the Genome Analyzer, previously known as Solexa). Oxford, in contrast, is a young but promising contestant in the increasingly heated race towards so-called “third-generation” sequencing technologies, which promise even more staggering increases in the ability of researchers to generate vast amounts of accurate DNA sequence data in a short period of time (see here for a fancy video illustrating the Nanopore approach).
The deal seems straightforward: Illumina contributes US$18 million to boost Oxford’s development of its sequencing technology, making it a significant minority shareholder; in return it receives an exclusive contract for marketing, sales, distribution and service of the Nanopore technology. There’s also a mysterious bonus clause:
Illumina has also agreed to make an additional equity investment upon the achievement of a specific technical milestone.
So far the precise nature of this “technical milestone” remains hush-hush, but no doubt we’ll hear more if and when Oxford achieves this goal.
Overall, this deal seems like a real win-win situation. Illumina gets exclusive access to a promising new technology, a shrewd move given that its current short-read platform is unlikely to stay on the cutting edge forever; in return, Oxford gets access to the powerful marketing, distribution and service engines at Illumina, and (more generally) to the expertise of the larger company in successfully commercialising complex scientific tools.
In addition, Illumina’s substantial investment (especially in these troubled financial times) is a real vote of confidence in Oxford’s platform – and a gauntlet thrown down to the other competitors in the third-generation stadium, such as Pacific Biosciences.
No word yet on a launch date for Oxford’s platform, but it certainly looks as though 2009 will be a massive year for the DNA sequencing field. And remember, as I’ve said before – the stiffer the competition in this area, the quicker you and I will be able to afford our whole genome sequence.
(Image is a screen-grab from here.)