After China placed Illumina on a government watchlist this week, in response to new tariffs imposed by the Trump administration, the DNA sequencing giant said it will continue to do business in the country as long as it’s able—while also dealing with a decline in annual revenues.
“We believe the opportunity in China is vast, and we will work through the current challenges with speed and hopefully get a resolution as fast as possible,” CEO Jacob Thaysen said on a call with investors as part of its annual earnings report, adding that the company has been in contact with the country’s commerce ministry to seek additional information.
Thaysen also noted that revenues from China currently make up about 7% of the company’s worldwide sales, with a 2024 sum expected to land around $300 million—a number that has been declining over the past three years.
“China is a significant market with an aging population,” he said. “It’s a country that many others are investing into—and prioritizing healthcare, and looking at sequencing as a key component of that… And we truly believe that Illumina—with our leading NGS technology and our innovation pipeline—are serving, and will continue to serve, Chinese customers and patients very well.”
“Wherever Illumina operates, we comply with all applicable laws and regulations,” Thaysen said.
For 2024 as a whole, the company reported $4.3 billion in revenue, down 2% compared to the fiscal year prior. Fourth-quarter sales, however, were up 1% compared to the same three-month period in 2023, with a $1.1 billion haul.
In terms of net income, Illumina posted $894 million for the year from its core sequencing segment—but when including more than $1.88 billion in impairment charges and other expenses related to its divestment of Grail last year, that number swung to an annual, consolidated net loss of $1.22 billion.
The company said that, at the end of last year’s fourth quarter, it still held another $1.22 billion in cash and equivalents.
Illumina’s stock price has dropped about 13% over the course of this week, to about $111.66 per share.
The company was added to an “unreliable entity list” by the Chinese government on February 4 alongside the clothing company PVH Corp., owner of brands such as Calvin Klein and Tommy Hilfiger. China also opened up an antitrust investigation into Google, following a 10% levy on trade and the removal of duty exceptions for lower-priced shipments into the U.S.
The country also retaliated with targeted tariffs—including 15% on U.S. coal and natural gas, and 10% on crude oil and farm equipment, as well as on larger automobiles and pickup trucks—and export restrictions on raw materials such as tungsten, tellurium and other minerals used in high-tech manufacturing.
Illumina has worked to grow its footprint in China in recent years, opening its first manufacturing site with a facility in Shanghai in 2022. At the time, the company said it planned to begin by producing its sequencing reagents before expanding to instruments and consumables by 2028.
Looking ahead to 2025, Illumina said its financial forecasts do not account for the potential impacts of the latest developments in China, as well as the new tariffs from the U.S. government—including the 25% duties currently on pause for Canada and Mexico plus those countries’ possible reprisals.
The company said core revenues are predicted to grow in the low single digits, landing in the range of about $4.28 billion to $4.40 billion.