Illumina’s newly appointed CEO, Jacob Thaysen, will take the reins of the gene sequencing giant at the end of September. Falling heir to the difficulties that have plagued the company since its botched acquisition of cancer blood test maker Grail, Thaysen will have to confront the company’s legal tangles with the European Commission and the Federal Trade Commission as well as its slumped market value.
We are confident that under his direction, Illumina can continue to execute on its goals and drive long-term shareholder value
Stephen P. MacMillan, Chair of the Board, Illumina
Thaysen to “Hit the Ground Running”
San Diego-headquartered Illumina, the world’s largest gene sequencing company, has appointed ex-Agilent Technologies exec Jacob Thaysen as its new CEO. After a decade leading up Agilent’s life sciences and applied market group, Thaysen will take on his new responsibilities on September 25.
Replacing interim chief executive Charles Dadswell, Thaysen is tasked with helping to “lead the company into its next phase of growth,” according to Stephen P. MacMillan, Chair of the Board at Illumina. “We are confident that under his direction, Illumina can continue to execute on its goals and drive long-term shareholder value,” he claimed.
“I’m planning to hit the ground running,” Thaysen said about his new role. This is something the new CEO will most certainly have to do as he inherits the difficulities that have plagued Illumina for some time. Not only will he need to rebuild Illumina’s leadership team, but Thaysen will also be responsible for pulling the company out from under its failing financial situation and resolving its disputes with EU and US antitrust authorities.
Grail Imbroglio
One of the big issues Thaysen will have to take on is Illumina’s ongoing legal battles with European and American antitrust regulators stemming from the company’s USD 8 billion acquisition of the cancer blood test developer Grail. Illumina acquired Grail, a former spinout, in 2021 despite regulatory suspicions that the deal would stifle competition from other cancer test companies. Going through with the deal before it was okayed by the authorities resulted in an EU fine of EUR 432 million.
“If companies merge before our clearance, they breach our rules. Illumina and Grail knowingly and deliberately did so by implementing their tie-up as we were still investigating,” said EU antitrust lead Margrethe Vestager in a statement.
Prompted by the Grail tumult as well as Illumina’s dwindling stock values, activist investor Carl Icahn then instigated a revolt that led to the expulsion of former chair John Thompson from the company’s board and the subsequent resignation of former CEO Francis de Souza.
While Illumina continues to be entangled in legal appeals against the European Commission and the US Federal Trade Commission over its acquisition of Grail, the US Securities and Exchange Commission (SEC) recently initiated an investigation into the deal, demanding disclosures “related to the conduct and compensation” of management from both companies.
Financial Downturn
Thaysen will also face Illumina’s less than positive financial outlook. With shares down nearly 70 percent since the Grail deal in August, 2021 and a market value that has plunged to USD 25 billion from the about USD 75 billion at that time, he has his work cut out for him.
While Icahn has claimed his support for Thaysen, it remains to be seen how other shareholders and investors will greet the appointment in light of Illumina’s ongoing legal battles and growing competition in the genomics space. Having recently reduced its financial projections for the rest of 2023, Illumina claimed last month that it forecasts revenues from DNA sequencers and supplies to stay “approximately flat.”
The company has been trying to set its financials straight and expand margins for some time, having let about five percent of its global workforce go, some 9,000 employees, at the end of 2022. In the first quarter of this year the firm announced its plans to cut USD 100 million from its annual expenses, a move that led to further workforce layoffs.
Yet there may be some light at the end of the tunnel the new CEO can capitalize on. Illumina’s NovaSeq X sequencing system is in strong demand, having already exceeded expected pre-launch orders during the first quarter of 2023. The company also continues to bring in considerable revenues from its consumables, and has recently partnered with Amgen to whole-genome sequence a cohort of approximately 35,000 DNA samples. The new CEO will have his hands full but by the middle of 2024, Illumina will have gone through its key pending court dates.
Photo credit: Illumina Inc.
