By Peter Loftus

Illumina shares tumbled 8% Friday on investor concerns about the future of the gene-sequencing equipment maker's business in China, growing competitive threats, and the potential for Trump administration cuts to federal research funding.

China's Commerce Ministry this week said it placed Illumina, the leading maker of next-generation sequencing machines, on its list of "unreliable entities," part of China's retaliation against President Trump's new tariffs on Chinese imports to the U.S.

Analysts say the move threatens to eliminate Illumina's China business, which is about 7% of total company revenue.

Illumina executives said during an earnings call late Thursday that they are working with the relevant parties to resolve the issue, and that the company's new 2025 earnings forecast assumes revenue from China.

Investors didn't react well, in part because they figure the forecast might fall if China revenue later gets taken out. Leerink Partners analysts say an Illumina exit from the China market seems inevitable, and analysts are taking the business out of their forecasts. Leerink said Illumina faces a Catch-22 about keeping China in its forecast because there are negotiations underway to try to preserve the business.

Investors also are concerned about emerging competition for Illumina, with heavyweight Roche set to launch a competing product soon, plus the potential for the new Trump administration to cut federal research funding to labs that buy Illumina equipment.

Illumina shares are down 14% since China placed the company on the unreliable entities list.

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February 07, 2025 13:15 ET (18:15 GMT)

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