A weak earnings forecast driven by disappointing sales in Europe hammered shares of genetics analysis biotech Illumina, Inc. (ILMN) during Tuesday trading. The firm’s stock dropped more than 23% by the closing bell.
San Diego-based Illumina creates tech platforms which are used for genetic sequencing and other genome-related analytic services. While these products have been hailed, particularly for their role in driving down the cost of sequencing, the firm dropped its 2016 revenue growth forecast from 16% to 12% during a first-quarter earnings call late Monday.
CEO Jay Flatley said that the revisions, including a lower-than-expected $572 million Q1 haul, were attributable to troubles in Europe and an unexpected dearth of upgrades to the company’s newer sequencing platforms.
“In particular, sales of the HiSeq 4000 were lower than anticipated, with somewhat more outsourcing to service providers and fewer upgrades from older generation instruments than our models predicted,” he said. Flatley also stated that senior U.S. sales managers will be dispatched to Europe as part of a management change.
Illumina has attracted investments from moguls like Microsoft founder (MSFT) Bill Gates and Amazon’s (AMZN) Jeff Bezos for a new early-stage cancer testing company, called Grail, that it’s launching.