By the numbers
Q2 Revenue: $1.18 billion
1% increase year-over-year
Q2 Net loss: $234 million
Year-ago net loss: $535 million
DNA sequencing provider Illumina named a new chief technology officer on Wednesday and said its chief medical officer has stepped down.
Steven Barnard, Illumina’s vice president and head of global advanced science, was named CTO, effective immediately. A search is underway for a new chief medical officer.
Barnard, who joined Illumina in 1998 as its first scientist and is credited with playing a key role in the launch of its NovaSeq X machines, is expected to continue to help improve R&D productivity and efficiency, the company said in a press release.
Alex Aravanis, who has served as chief technology officer, is departing to become CEO at another company, Illumina’s interim CEO, Charles Dadswell, said on the second-quarter earnings call.
Phil Febbo, chief medical officer, left Illumina on Monday, according to a regulatory filing. On the earnings call, Dadswell said the company will “take some time to look at that organization. We’re going to evaluate where we are on the clinical side and on the medical side.”
Q2 insights
The gene sequencing market leader said its second-quarter revenue increased 8% sequentially from the first quarter, but it anticipates a negative impact in the second half of the year from customers growing more cautious in their purchasing and China’s economic slowdown.
Illumina has also seen a larger-than-anticipated temporary decline in high-throughput sequencing consumables as it transitions more customers than expected to the NovaSeq X instrument, Dadswell said. The company projected core sequencing consumables revenue will decline by about 3% year over year.
The rollout of NovaSeq X, which Dadswell called Illumina’s most sophisticated platform to date, has been a more challenging process than anticipated, the interim CEO said. “We have identified issues in the field that are typical in new product releases. To address these issues, we have taken actions including a planned software update that was released in June,” he added.
Grail revenue of $22 million rose 83% year over year on greater adoption of the Galleri blood test to detect cancer.
Illumina, which has been wrangling with regulators over its Grail acquisition and was ordered by the European Commission to pay a 432-million-euro fine for closing the deal early, announced a $100 million cost-cutting plan in April.
CEO search
Dadswell told analysts on the call that Illumina’s board continues to actively search for a new CEO and is considering both internal and external candidates. “They’ve been really encouraged about the outstanding quality of candidates they’re seeing,” he said.
Dadswell took the helm at Illumina after Francis deSouza resigned in June following a proxy battle with activist investor Carl Icahn, who has pushed for the company to divest its Grail cancer test unit.
Financial outlook
Illumina expects its core sequencing revenue to be flat year over year. It forecast non-GAAP earnings per share in a range of $0.75 to $0.90 for 2023, including dilution from Grail’s operating loss of about $670 million. The company previously forecast its non-GAAP earnings per share in a range of $1.25 to $1.50.