Illumina CFO on using genome tech to beat pandemic – Financial Director

From the start of the coronavirus outbreak, technology from Illumina has been at work helping defeat the pandemic. As a result of two Chinese university teams using the US biotechs sequencing equipment, the genome (or genetical material) of the coronavirus was published on January 10, 2020 and vaccines from Oxford University/AstraZeneca, Moderna and Pfizer-BioNtech vaccines were designed within days of this blueprint being revealed.

The latter two are the worlds first genome-based vaccines and have been developed without the companies ever needing to have the virus on site. Sequencing is instrumental to understanding not only the make-up of the virus, but its epidemiology, how it mutates, how it evolves, and also to develop a vaccine for it, says Illumina CFO Sam Samad.

One year on and sequencing the virus is as important as ever in the pandemic fight. Illuminas technology is powering genomic surveillance in countries around world, such as at the Sanger Centre in Cambridge where the COG-UK team identified the new B1.1.7 variant; and in the US where Illumina is working with the US CDC and the company, Helix, to plot the path of new variants across US States.

Our ability to use sequencing to do surveillance, is critical. We need to understand how the virus is mutating and how its also transmitting across communities. Surveillance will also tell us whether the virus is evolving to escape the vaccines that are now being delivered in most countries.

That really underscores the importance of our technology in this fight, says Samad, who joined the San Diego, California-based firm at the start of 2017. Other pandemics will happen in the future, so the question also becomes how do we prevent them? How do we, catch them before what happened with Covid repeats? asks the Canadian.

Illumina was founded in 1998 based on BeadArray technology discovered at Tufts University. Arrays require a prior knowledge of the genome of the sample being investigated. In 2007, Illumina acquired the UK-based company, Solexa, for its next generation sequencing (NGS) technology which Illumina has gone on to develop. NGS doesnt require any understanding of the sample to be analysed and can work out the full genome of any organism.

Illumina has gone on to develop a range of products servicing the sequencing, genotyping, gene expression and proteomics markets has resulted in the rapid growth of its share price- resulting in the firm having a market value of $54bn by the start of the year.

Major sites have been developed in Foster City, near San Francisco, Cambridge in the UK focusing on R&D, and an Asian hub in Singapore combining shared services and manufacturing functions, as well as a major plant in China.

Infectious diseases is just one area of focus for Illumina. Another is oncology, where the company is working with a number of pharma and biotech companies to develop cancer testing to determine which medicines are best for which cancer patients. NGS is also fundamental to identifying the cause of rare genetic diseases in families; and to understanding the chromosomal health of an unborn baby through non-invasive prenatal testing (NIPT).

Oncology is now our biggest area, but we also work in genetic diseases, and reproductive health and non-invasive prenatal testing, taking sequencing and evolving it into a standard of care in health systems around the globe. Just shy of 50 percent of our revenues are in the clinical setting, says Samad.

A big change in Illuminas offering came five years ago when it pivoted from a mainly research approach, supplying instruments, reagents and consumables to academic labs and large genome centres, to focusing on clinical applications of genomics. It acquired Verinata Health, a leading provider of NIPT, and with it, NGS and Illumina started to become as familiar to clinicians as they had been to scientists.

The speed of development reflects the need to innovate in a fast-changing area of science. I think we have an obligation through our technology to move fast.

What you thought was possible 10 years ago, is completely different than what we think is possible today. Who would have thought that through sequencing, we could offer early screening to potentially predict, find it and cure cancer before it becomes deadly, he says.

The pace of development was challenged by the coronavirus pandemic where the majority of staff had to move to remote working but having lab staff designated essential workers meant operations could continue unabated. It meant R&D and manufacturing staff could come to the labs to continue work, says Samad.

A colour coding of sites, from green meaning nothings wrong to red, requiring all staff working remotely, except for essential functions was devised. At some point, most of our sites became really red and orange, resulting in 7,500 out of 8,000 staff working from home, but everybody handled it really well, he says.

Samad came into Illumina with a skill set in finance developed across the healthcare sector. After completing a finance degree and MBA at McMaster University in Ontario, he joined US pharma giant Eli Lilly where over the course of 12 years he rose from being a financial analyst to finance director of the groups Swiss operation before finishing as CFO of Eli Lilly Canada.

It was an opportunity to develop the rigour and discipline demanded by working in finance in a global player. I cant emphasise enough how important it is to get some experience in a large, well-run disciplined institution like Eli Lilly. It was really, really important for me just to get those building blocks and foundations in my career, he says.

But it was at Cardinal Healthcare, another major US player, that he went on to group leadership roles, as CFO of its pharma segment and then treasurer of the whole firm, positions demanding strong decision-making. If you get it wrong, you can send the company into a tailspin that might mean it goes bankrupt, because youre talking about debt issuances and capital availability, he says.

There was also the challenge of addressing the expectations of debt investors, where conservatism pays off in terms of how you manage your cash position, adds Samad.

The opportunity to become group CFO at Illumina offered the chance to join a fast growth company with an offer based on cutting edge science. I felt there was so much runway ahead as the space was so under-penetrated, he says.

What he could bring was the discipline needed for a business that had listed 20 years ago but he says was still operating in an accelerated growth, start-up mode, with some processes not having been fully built out.

What Samad sought to develop was a stronger engagement between the finance team and the rest of the business in an organisational structure for optimally supporting the business through single point accountability.

We needed, for example, a research and development (R&D) person in finance that supports the R&D organisation and another in finance supporting the commercial organisation, and another specifically supporting the product side of the business.

The first six months of Samads time finessing the finance function was a process of evolution. You dont get a structure right the first time, you do it incrementally, and you do it over time, he says.

A major innovation was devising exhaustive and comprehensive dashboards on data visualisation software Tableau covering everything from revenues to balance sheets and R&D. Its reviewed by the executive team twice a month, but I want people to have access 24/7.

That helps with speed of decision making, but it also helps in terms of managing bandwidth and understanding resource constraints on the organisation. because youre not having to ask people all the time to run reports for you, adds Samad.

Despite the challenges presented by the coronavirus pandemic, in September 2020, Illumina announced the proposed $8bn acquisition of cancer screening specialist Grail. The deal raised some eyebrows in the market given that Illumina had created and spun out Grail just four years previously, but the move reflects the willingness to consider any action that can bring together the right ingredients for value creation, even if it appears unwieldy.

Samad says the decision reflects a strategic assessment that Grails proposition today: using blood-based tests known as liquid biopsies to catch cancer early, would fit well in the group, after we had stepped out of the space, to allow it to thrive and evolve through $2bn of R&D funding.

Following fantastic, really promising results for the Grailtests, the decision was taken in late 2019 to acquire the business to grow Illuminas footprint in cancer. But what was crucial to explain to the market was that its a $60bn target market thats totally incremental to us, says Samad.

You need to set the stage in terms of how you explain it to your shareholders, to make sure they get why we can accelerate this market with our commercial capability, with global our operations, he adds.

Samad says he balances him time between priorities such as explaining Grail the story to investors, to focusing on areas for funding over the next five-year cycle.

These are often very difficult conversations, that are always emotional. So you need your people to help and you need to have a good rapport with your executive team, your peers and partners to do that as well, he says.

He says that without his key staff in accounting, treasury, FP&A, and leaders across global regions, I wouldnt be able to have the capacity and bandwidth that would allow me to focus on the key things, he explains.

Samad says closing the Grail deal created a unique set of challenges with the restrictions that we have in terms of travel. But a big focus of ours is that even in times of global crisis, we are really focused on making sure that we continue to find opportunities to move our strategy forward.

We believe these times present a unique opportunity for companies that really focus on executing on their strategy. If they are bold and make big steps, they will come out on the other side of this ahead, he adds.

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Illumina CFO on using genome tech to beat pandemic - Financial Director