NEW YORK – MGI Tech reported last week that its revenues for the first half of 2024 dropped 16 percent year over year, driven by a decline in its next-generation sequencing and lab automation businesses. In addition, the Chinese NGS instrument maker reduced its workforce by approximately 190 compared to the end of 2023.
According to a filing with the Shanghai Stock Exchange on Saturday, MGI booked RMB 1.21 billion ($169.9 million) in revenues for the six months ended June 30, compared to RMB 1.44 billion in H1 2023.
Sequencing revenues were RMB 1.00 billion, accounting for 83 percent of total revenues and decreasing roughly 9 percent from the same period a year ago, when revenues were RMB 1.10 billion. Instrument revenues declined 12 percent year over year while consumables revenues dropped 4 percent. The company sold 454 sequencers during the first half of the year.
By region, MGI's sequencing revenues in mainland China were RMB 680.0 million, down 2 percent from H1 2023. The decline in the domestic market was mainly due to prolonged funding approval cycles, the company noted.
Outside of mainland China, MGI booked RMB 325.0 million in sequencing revenues, down 19 percent from the year-ago period, mainly due to "geopolitical factors and competition," according to the company.
More specifically, MGI's sequencing business booked RMB 106.1 million in revenues in Asia-Pacific outside of mainland China, down 42 percent from the prior year. The company also saw a 6 percent year over year decline in Europe and Africa, booking RMB 135.1 million in sequencing revenues. Meanwhile, sequencing revenues in the Americas were RMB 83.8 million, up 13 percent from H1 2023.
MGI said it opened new European headquarters in Berlin during the first half of 2024. It also completed a manufacturing facility in California, which will produce DNBSeq-G99 sequencers for customers in the region.
MGI booked RMB 97.0 million in revenues from its lab automation business in H1, declining 17 percent year over year. In addition, it garnered RMB 88.2 million from a business segment that includes multiomics, ultrasound equipment, and lab information management systems, a 60 percent decline from H1 2023.
MGI's R&D spending in H1 was RMB 371.9 million, down 14 percent from RMB 432.1 million in the year-ago period. Meanwhile, its SG&A spending in H1 was RMB 653.1 million, a 12 percent increase from RMB 581.1 million last year.
The company's H1 net loss attributable to shareholders was RMB 298.2 million, compared to a net loss of RMB 98.0 million in H1 2023. Loss per share was RMB .72 compared to a loss per share of RMB .24 during the same period last year.
MGI also appeared to have reduced its workforce by approximately 190 in H1. MGI said it had about 2,670 employees at the end of the period, including 859 in R&D and 887 in sales. This is down from 2,860 employees reported at the end of 2023, including 959 in R&D and 917 in sales.
MGI did not immediately respond to a request to comment about the layoffs. A spokesperson from Complete Genomics, MGI's US subsidiary, confirmed a "headcount change" within Complete Genomics due to "regular business fluctuation."