NEW YORK – Illumina's decision to hire former Agilent Technologies executive Jacob Thaysen as its next CEO has drawn mixed reactions from customers and investors, highlighting both the strengths and weaknesses of his record in the biotech industry.
Illumina's share price fell about 5 percent on Tuesday, the day of the announcement, suggesting he was not the CEO some investors had been hoping for. But Thaysen has the support of at least one important Illumina investor — Carl Icahn. On Thursday, the activist investor, whose campaign to upend Illumina's board included comments critical of Thaysen's predecessor, Francis deSouza, and contributed to the vacancy — posted on social media that he had spoken with Thaysen. "I think he will do an excellent job and he has my full support," Icahn tweeted.
Despite more than a decade in the genomics industry, Thaysen has a relatively low profile, especially among Illumina's research customers. Those who have dealt with him personally spoke highly of his acumen and personality, while others raised concerns about their experience with Agilent's customer service under his watch.
"Jacob has low ego, was very friendly, and followed up on action items," said Toumy Guettouche, a genomics industry veteran who interacted with Thaysen while the latter was in charge of Agilent's diagnostics and genomics group (DGG) from 2014 to 2018. "He was popular with people that worked with and for him," said Guettouche, who was a sequencing lab director at the time, purchasing Agilent target enrichment panels.
Illumina stressed Thaysen's business acumen in its announcement, noting that in 2022, the Agilent life sciences and applied markets business, where he was responsible for analytical instrument and informatics products, "had revenue of approximately $4 billion, more than 50,000 customers, and an operating margin of approximately 30 percent."
Still, Thaysen has never been CEO before, and in addition to improving Illumina's fortunes in a suddenly competitive sequencing market, he will have to navigate adverse regulatory processes in the US and in Europe related to the company's acquisition of liquid biopsy firm Grail, figure out what to do with the Grail business, and even deal with an investigation by the US Securities and Exchange Commission.
"He has his work cut out for him," Guettouche said.
Illumina's shares have stayed down about 5 percent since naming Thaysen CEO. "People probably expected someone that had closer ties to [board Chairman] Stephen MacMillan," said Kyle Mikson, an analyst at Canaccord Genuity. "Or maybe someone more high profile or who had Illumina ties." While Thaysen did lead a genomics business at Agilent, "that was years ago," Mikson said, suggesting he may no longer have strong relationships in the next-gen sequencing market.
And while Thaysen checks a lot of the experience boxes in terms of managing large revenue streams and driving profitability, "he hasn't led an entire organization," Mikson said. "He definitely has good experience, but going from senior VP to CEO is different."
Moreover, his acquisition record is somewhat marred by Lasergen, a Baylor College of Medicine sequencing technology spinout acquired by Agilent while Thaysen was in charge of Agilent's DGG. The project to build Agilent's own sequencer was shut down in 2020, resulting in a $98 million write-off. "It was a gamble, and it didn't work out," Guettouche said. "It's not easy to build a sequencing box." He noted that Illumina's recent acquisition record has also been spotty, with the high-profile quagmires of Pacific Biosciences — a failed bid — and Grail partially offset by successes, including Edico Genome.
While some in the genomics industry have reacted to Thaysen's appointment with sentiments of underwhelming customer experience dealing with Agilent, that function is handled as part of Agilent's CrossLab Group and separate from each "vertical" business, Stephen Cohan, VP of worldwide customer service, said in an emailed statement.
Thaysen's primary objectives in his first year will likely be to resolve the Grail situation and improve core Illumina revenue growth and margins. "They're coming from a really poor year, so it's a low bar," Mikson said. Past that, how he'll lead Illumina remains to be seen.
On paper, Thaysen has the experience to address all of Illumina's concerns, whether they be margins or the research customer experience. He even got his start at Agilent through its 2012 acquisition of Dako, a Danish oncology companion diagnostics firm where he was VP of R&D, which should be useful as clinical sequencing has become the largest contributor to sequencing consumables revenues for Illumina.
And with a doctorate in nanotechnology, he may even have the R&D chops to spur innovation at the firm.
"Innovation doesn't mean just making a bigger instrument," said Catharine Aquino, a sequencing expert at the Functional Genomics Center Zurich. "Trying to come up with a new way to look at the genome, that's the innovation that we're expecting of [Illumina]," she said, adding that she has been waiting for the firm to enter the in situ sequencing market, which is adjacent to high-resolution spatial biology.
"As consumers, we're just waiting to see what's going to happen" at Illumina, she said. "I think it really depends on how they see themselves."