On Tuesday, Illumina laid out a three-year plan for investors detailing how the struggling DNA sequencing company plans to get back to growth. To do so, its CEO said, the company is making it easier for customers to derive and interpret biological insights.
CEO Jacob Thaysen and chief technology officer Steve Barnard spoke with Endpoints News after Illumina’s presentation, going into more depth on their plan to reinvigorate the company, which over the last 18 months has experienced high executive turnover and flat growth. The period has been a dour contrast to Illumina’s earlier history as a scientific and market darling.
By 2027, the company projects that its revenue growth will reach the “high single digits.”
“We actually have a pretty good line of sight of how we’re going to get back to growth,” Thaysen said.
But he’ll have to do so as Illumina cuts $200 million in costs over the next three and a half years, plans which were disclosed during the investor event, including reductions in manufacturing, infrastructure, and general and administrative functions.
Illumina became the leader in DNA sequencing in part by driving down costs and is part of the race to bring the routine cost of deciphering a person’s genetic code to as little as $100.
Thaysen said prices have traditionally been measured by the cost per gigabase of data generated. But Illumina is putting more emphasis on its ability to simplify workflows and make the resulting data easy to interpret. The company has invested heavily in sample preparation to ready pieces of DNA for sequencing and tools for analysis, which could differentiate Illumina from its growing competition.
“That’s where we are trying to differentiate ourselves, saying this is an end-to-end solution,” Thaysen said.
Jacob ThaysenTuesday’s update came less than a year after Thaysen took over as CEO. That followed an activist challenge from investor Carl Icahn, who made Illumina’s ill-fated $8 billion deal for the cancer diagnostics company Grail the centerpiece of his campaign for changes at the company.
Last spring, Icahn backed away from his activist effort after Illumina announced plans to divest Grail, a commitment the company made good on in June. Asked about Icahn, Thaysen said the two spoke after he became CEO.
“He was also a supporter of hiring me,” Thaysen said. “Carl was also a very strong supporter of us going back and driving the core business.”
The back-to-basics strategy includes Illumina continuing to make a push into hospitals and clinics. The goal is to make the analysis of whole genomes the standard across healthcare for greater preventative care.
Canaccord Genuity analyst Kyle Mikson said in an interview that Illumina outlined a solid path forward, but it could take a little while for any comeback to unfold. His perspective appeared to be in line with the larger market. Illumina’s stock $ILMN ended Tuesday down 4%.
“It was a positive step, but Illumina is still a work in progress,” Mikson said.
Getting into multiomics
Illumina is also moving into so-called multiomics that layer in RNA, protein and additional biological data. In July, Illumina bought Fluent BioSciences for $85 million in upfront cash to bolster single-cell analysis, allowing for a precise look at how individual cells operate.
Steve Barnard“Where the science is going is, the more cells you actually look at, the better insights you’re going to get. So inevitably, if you’re looking into the future, you want something that scales, cost-wise. Fluent checked all those boxes,” Barnard said.
Next year, Illumina and Standard BioTools plan to release a product that can measure 10,000 proteins, according to Barnard. The effort is among a flurry of activity in proteomics, a field that’s finally making progress in determining the makeup and function of the human body’s proteins.
Pharmaceutical companies are increasingly interested in multiomic data as they hunt for drug discovery targets. Thaysen said such firms represent a high-growth market for Illumina.
“This could actually change how we think about drug discovery,” Thaysen said.