Illumina’s sales dropped in the second quarter, dragged down by weak demand in China and the company shipping fewer of its mid-throughput DNA sequencers than expected.
The company is among the most visible examples of a China slowdown weighing on life sciences companies. Jacob Thaysen, the CEO of Illumina, said on Tuesday during an earnings call that revenue from China was down 35% during the quarter compared with the same period a year ago.
Jacob ThaysenIn China, Illumina is up against MGI, a Chinese company that competes across Illumina’s portfolio. But Thaysen primarily attributed the sales drop to macroeconomics, not intensifying competition.
“We are attributing the biggest part of this to the economic environment,” Thaysen said. He added that Illumina retooled the company’s commercial structure in China, and he expects the Chinese market to eventually “turn.”
While MGI is a force in China, the company has struggled to expand in the US.
Illumina leaders said the company’s flagship DNA sequencers, NovaSeq X, have sold well. But the company shipped fewer of its mid-throughput machines than expected.
Overall, Illumina recorded $1.09 billion in quarterly revenue, 6% less than the prior year. The company revised down flat growth expectations and now expects 2024 revenue to decline by 2% or 3% compared to the prior year. But Illumina raised its non-GAAP operating margin guidance to a range of 20.5% to 21%.
In June, Illumina divested the cancer testing company Grail, a major priority under Thaysen. On Aug. 13, Thaysen and other Illumina executives will lay out a broader vision during a strategy update.