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New CEO Of Illumina Reduces Sales Projections For 2023



New CEO Of Illumina Reduces Sales Projections For 2023

(CTN News) – On his first quarterly earnings call as Illumina’s chief CEO, Jacob Thaysen didn’t have an easy start.

Its third-quarter revenue also fell short of estimates, as did placements of its latest analyzer hardware, and the company cut its installation projections for the rest of the fiscal year.

Thaysen told investors the results were disappointing on Thursday. As the macroeconomic environment remains challenging, customers are more cautious and constrained about their purchases.
Revenues for the company were $1.12 billion, essentially flat from the same period in 2022 and down 5% from $1.18 billion in the second quarter of 2017.

By the end of fiscal 2023, the company plans to ship more than 390 of its latest high-throughput NovaSeq X instruments, which cost about $200 each. These projections, however, have now been revised to 330 to 340.

In the third quarter, the company shipped 97 NovaSeq X sequencers, compared with Wall Street analysts’ expectations of about 100.

In addition, Illumina said its core DNA sequencing revenues will fall by 3% to 4% from 2022 levels for the full year. A 10% drop in premarket trading followed the announcement by the company.

Although we cannot control the external environment, Illumina’s management team and I remain focused on supporting our customers and executing our operations. During my comprehensive review of the business, I will re-examine our strategic initiatives and long-term revenue growth targets. The new targets will be presented to you later next year,” said Thaysen, the former Agilent executive who became Illumina’s chief after Francis deSouza departed.

We expect the results in 2024 to be very similar to those in 2023,” he said. Geopolitical issues remain persistent, and macroeconomic conditions are unlikely to improve in the near term.”

The Grail situation has also been passed down to Thaysen by Illumina. As a result of a U.S. regulatory order, the company is appealing it in court on both sides of the Atlantic. In this year’s directive, the U.S. Federal Trade Commission and the European Union’s antitrust watchdogs ordered Illumina to divest its ownership of the multi-cancer blood test developer.

Earlier this month, the European Commission ordered Illumina to submit a plan for “disposing of Grail.” The company can decide how to dispose of Grail, such as by selling it to a buyer or spinning it out.

Thaysen said he has enlisted the help of a special committee that will work with Illumina’s management team on the divestiture order and make “fast decisions.”

Upon filing confidential securities forms with the SEC, Thaysen said Illumina will either reach out to investors or suitors to help fund Grail’s new beginning.

Those efforts would be parallel to its ongoing legal appeals, which are currently before the US Court of Appeals for the Fifth Circuit and the European Court of Justice – the latter of which is set to hear oral arguments mid-December.

Should the company lose in either court, it will not take its case to any higher levels, at which point it would fully focus on divesting. According to Thaysen, the current “appeals” do not just relate to Grail, but could also provide Illumina with flexibility for its future plans.

But the price tag may be the hardest part of saying goodbye to Grail. According to the EC’s divestment order, an independent Grail must begin with enough cash to fund two and a half years’ worth of operations.

The company’s ongoing operating expenses, for which Illumina is currently responsible as it continues to manage Grail at arms’ length, could total about $1.75 billion, but Illumina may not be required to raise that cash alone.

Joydeep Goswami, Illumina’s chief financial officer, said on the investor call that several funding options are being considered.

In case we wanted to go for a spin, a sponsor may be able to put in some or all of the money needed,” Goswami said. “The capital markets transaction could be split, where you raise money in capital markets for Grail and in the IPO market. Private placements depend on specific market conditions and interest in Grail.”


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