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Accounting Rules Prevent Illumina From Booking Revenue for at Least 13 Sequencers

NEW YORK (GenomeWeb News) — Accounting rules will prevent Illumina from booking most of the revenue from the sale of at least 13 Genome Analyzers that Solexa shipped to early-access customers, Illumina President and CEO Jay Flatley said at an investor conference last week.
 
A few weeks before it was acquired by Illumina in late January, Solexa said it had begun invoicing early-access customers in the fourth quarter, and that it expected to begin recording revenue from these placements in the current quarter.
 
“Due to the wonders of acquisition accounting, much of the revenue that occurred [before the merger was completed], even though it was not recognized as revenue for Solexa, … will not be recognizable by us,” said Flatley, who spoke at the Cowen and Company 27th Health Care Conference in Boston. “So that revenue will disappear, it will not be recognized either by Solexa or by Illumina.”
 
The rule will affect all 13 units that Solexa shipped in 2006, as well as any additional systems shipped between Jan. 1 and Jan. 26, the date Illumina completed the acquisition, a company spokeswoman told GenomeWeb News sister publication In Sequence.
 
Also at the conference, Flatley said although the integration of Solexa is “going quite well,” R&D has not been consolidated yet. “We think it will take a little bit longer for us to put together all of the key R&D teams,” Flatley said.
 
Illumina had been conducting internal research in the area of sequencing, he added, which will be combined with Solexa’s R&D groups.
 
He also reiterated that as of early February, the company had received 40 orders for the instrument, including the 13 systems it had shipped to early-access customers by the end of 2006.

A complete version of this article appears in the current issue of In Sequence, a GenomeWeb New sister publication.

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