Illumina expects core segment annual sales to decline due to biotech funding crisis

(Reuters) – Genetic sequencing machine maker Illumina on Tuesday predicted sales in its core segment will decline in 2024, a sign that subdued demand for its instruments used in genetic testing could extend further this year. year.

Illumina has seen slow demand for its tools and services, used to develop therapies and vaccines, in key markets such as China, and cautious spending by its clients, such as biotechnology companies, in a context of high interest rates.

“Consumable sales remained solid as customers continued to increase their sequencing activities, but demand for instruments declined in a tight financing environment,” said CEO Jacob Thaysen.

The company expects Core Illumina revenue to decline 2% to 3% compared to the prior year. Previously, the company expected the segment’s annual revenue to remain stable.

On an adjusted basis, it expects earnings per share of $3.80 to $3.95 for its core segment in 2024. Analysts expect full-year adjusted earnings of $3.91 per share for all the company.

Of Illumina’s two reportable segments, Core Illumina and Grail, the latter was spun off on June 24.

It decided last December to divest cancer diagnostic test maker Grail after the companies clashed with US and European antitrust authorities for more than two years and faced strong opposition from activist investor Carl Icahn.

San Diego, Calif.-based Illumina’s quarterly revenue was $1.11 billion in the second quarter, compared with analysts’ estimate of $1.08 billion.

On an adjusted basis, it earned 36 cents per share during the quarter ended June 30, while analysts on average expected 90 cents per share.

The company signaled it would take a $1.47 billion goodwill impairment charge in the second quarter related to the Grail spinoff.

(Reporting by Vaibhav Sadhamta; Editing by Pooja Desai)