By David Wainer

Last month Illumina shareholders received a warning shot. In response to President Trump's initial tariff measures, the Chinese government added the maker of gene-sequencing equipment to its list of "unreliable entities."

Now Beijing is going further. Retaliating against the White House's latest 10% tariff on all Chinese imports, China's government said Illumina will be barred from exporting gene sequencers to China.

Illumina stock, which had tumbled 5% Monday, fell further on Tuesday morning. That took its year-to-date decline to about 40%.

Just as important, however, as what China said is what it didn't say. The ban doesn't explicitly stop Illumina from selling reagents, the consumables required to operate its machines, noted Leerink Partners analyst Puneet Souda. That means it may still generate some sales in China.

An Illumina spokeswoman said it was assessing the impact on its China operations. She said the company wasn't banned from operating in China, and would continue to serve customers there.

Why is China targeting Illumina? Analysts cite two key reasons. First, Beijing was reportedly angered by Illumina's lobbying efforts in Washington to restrict Chinese competitors. More significantly, China has long sought to bolster its own biotech sector, and gene-sequencing technology is foundational to that ambition.

At this stage, it is fair to ask how much worse can things get for a company that is still highly profitable and dominates the gene-sequencing market.

The shares are down some 70% over the past five years. The stock price has plummeted from about 100 times expected earnings a year ago to just 18 times today. China is an important market but accounts for just 7% of revenue-a share that has been declining in recent years.

Illumina's stock may be nearing a point of opportunity.

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March 04, 2025 10:35 ET (15:35 GMT)

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