Illumina's (ILMN) mid-teens clinical growth appears sustainable over the next one to two years, driven largely by oncology testing and screening applications, as the company sees building clinical momentum and fading competitive concerns, RBC said in a Thursday note.

With clinical markets now comprising over 50% of the company's sales, growth has accelerated to 20% in each of the past two quarters, supported by robust growth forecasts for Illumina's oncology customers, according to the note.

Illumina sees fading competitive concerns with Roche's Axelios 1 sequencing update seeing mixed response, RBC said, adding that it did not see any updates at Roche's investor event earlier this week to change the narrative.

Additionally, RBC said that the weakness Illumina is seeing in academic demand is an industry-wide problem and that several new product launches should enable demand to at least flatten by next year, which will be enough to meet or exceed Wall Street forecasts.

RBC has an outperform rating on the company, with a $170 price target.

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