Gene sequencing giant Illumina ended 2021 with a bang, thanks to gains in sales of instruments and consumables in the oncology, reproductive health, genetic disease and research markets.
Illumina, San Diego’s second-largest public company by market valuation, posted annual revenue of $4.5 billion, up 40% from 2020.
Adjusted earnings reached $892 million, or $5.90 per share. That’s up from adjusted net earnings of $4.50 per share a year earlier.
The results did not surprise investors. Illumina gave an overview of its financial performance at a JP Morgan investor conference last month. Highlights include the delivery of a record 3,200 gene sequencing instruments in 2021, bringing Illumina’s total install base to 20,000.
For its fourth quarter, Illumina revenue reached $1.2 billion, up 26% from a year earlier.
Adjusted earnings for the quarter were $117 million, or 75 cents per share. That’s down from last year’s adjusted earnings of $1.22 per share, primarily due to higher research and development spending in the quarter as the company ramps up work on its projects. Chemistry X and Infinity.
Chemistry X aims to revamp the company’s consumable recipes to provide faster turnaround times, more accurate results and potentially lower costs for gene sequencing. Infinity is a long-read workflow that aims to read DNA in bigger chunks, which could aid in the diagnosis of rare diseases and provide deeper insights into certain aspects of genomics.
Illumina is expected to reveal more details about Chemistry X at a client/investor event this fall. It plans to launch its Infinity program in the second half of this year.
The company also updated its $8 billion acquisition of cancer diagnostics company Grail, which is being challenged by competition regulators in Europe.
Grail has developed a test that can screen for up to 50 different types of cancer. It runs on Illumina’s gene sequencing instruments, and regulators have signaled that the deal would cause Illumina to favor Grail over other cancer diagnostics vendors that also rely on its instruments.
Despite the warnings, Illumina acquired it anyway in August. Subsequently, the European Commission asked Illumina to run Grail as a stand-alone entity while it considered whether the merger would harm competition.
This investigation was to be completed in March. But now it looks like the probe will drag on into the second quarter of this year.
“We are currently in the phase where we are discussing potential remedies that might work for this deal,” chief executive Francis deSouza said in a conference call with Wall Street analysts. “The pause event right now gives both parties time to sort this out and discuss potential remedies. And that means it pushes the timeline back a bit.
Still, Grail’s Galleria cancer test finds a first audience. It has been made available on a trial basis by 11 employers, who offer it as a benefit to retain workers. Eight health systems have signed up and 1,500 providers have ordered the test in 2021.
Grail posted revenue of $10 million in the fourth quarter and is expected to generate revenue of $70-90 million in 2021.
Illumina released its results Thursday after markets closed. Its shares ended trading at $358.08 but fell to $355 in extended trading on the Nasdaq.