(Reuters) - Shares of Illumina Inc ILMN.O rose 16 percent on Tuesday, after the company unveiled new technology, which is expected to eventually reduce the cost of sequencing to $100 per human genome, prompting a slew of price target increases.

The offices of gene sequencing company Illumina Inc are shown in San Diego, California January 11, 2016. REUTERS/Mike Blake

It took government-funded scientists $3 billion and 13 years to sequence the first human genome by 2003.

Illumina on Monday unveiled its NovaSeq sequencing platform, which is expected to deliver three-times faster and twenty percent cheaper sequencing over existing models.

In the way that Illumina’s HiSeq X enabled the $1,000 genome, future systems derived from NovaSeq architecture could enable the $100 genome, Chief Executive Francis deSouza said.

The human genome is the full complement of DNA, or genetic material, a copy of which is found in nearly every cell of the body.

Gene-sequencing is a method to analyze the genome, and can among other uses, help identify inherited disorders and markers of disease progression.

A complete replacement of instruments used by Illumina’s current customers represents a $2 billion opportunity alone, and the company believes the lower price could drive further market expansion, Barclays analysts said.

Whether Illumina, which also disclosed a partnership with IBM's IBM.N Watson unit, could return to robust instrument growth weighed on the stock last year.

Adding further capacity - even with a major upgrade - is unlikely to lift demand, especially from customers that are still struggling to meet margin targets and find it hard to fork out $985,000 for NovaSeq, Leerink analysts said.

The company’s stock plunged 25 percent on a weak third-quarter forecast in October. Overall, its shares lost a third of their value in 2016.

Last January, the company announced it was forming a new company called Grail to develop a universal blood test to identify early-stage cancers in people with no symptoms of the disease. reut.rs/2iAl0eJ

Coupled with Grail, as well as the ramp up of several new precision medicine initiatives, Illumina has the pieces in place to return to mid-teens organic revenue growth by 2018, Bank of America Merrill Lynch analysts said.

BofA Merrill upgraded the stock to “buy” from “neutral” and raised the price target to $175 from $145.

As part of the J.P. Morgan healthcare conference, the company forecast fourth-quarter sales of $619 million, about $6.5 million above Thomson Reuters I/B/E/S estimates.

The company’s stock rose as much as 18.1 percent to $167.10, its biggest intraday percentage gain in nearly five years.