Corvex's Meister joins the board at Illumina. Here's how he can create value for shareholders

Company Overview - Illumina provides sequencing and array-based solutions for genetic and genomic analysis, enabling the adoption of genomic solutions in research and clinical settings [1] - The company's DNA sequencing technology is based on reversible terminator-based sequencing chemistry, known as sequencing by synthesis biochemistry [1] - Illumina's BeadArray technology combines microscopic beads and a substrate to produce arrays that can perform multiple assays simultaneously [1] Recent Developments - On March 25, Illumina announced that Keith Meister will join the board on March 28, and Dr. Scott Gottlieb has been elected as the non-executive chair of the board [3] - Stephen MacMillan will retire as a director, having joined the board in June 2023 [3] Financial Performance - Illumina's revenue surged by approximately 40% from $3.2 billion in 2020 to$4.5 billion in 2021, with EBITDA increasing from $800 million to$1.1 billion during the same period [4] - Current revenue stands at $4.3 billion, with EBITDA at$900 million, and the stock closed at $80.00 [4] Challenges and Setbacks - Post-pandemic, demand for sequencing machines declined, primarily due to the costly spin-out and reacquisition of its Grail business, which was acquired for$8 billion [5] - The acquisition faced regulatory challenges, including a block from the European Commission and a significant fine [5] - Illumina's market valuation has dropped from $70 billion to less than$13 billion due to these challenges and geopolitical setbacks in Russia and China [5] Market Position and Strategy - Illumina controls over 80% of the global gene-sequencing market and has an installed base of more than 20,000 machines [6] - The company operates under a razor-and-blade business model, with machine margins around 30% and consumable sales margins at approximately 80% [6] - The transition to a new generation of sequencing technology, NovaSeq X, is expected to drive long-term growth but may create short-term revenue pressure [6] Board Composition and Future Outlook - Keith Meister's addition to the board is seen as a positive move, given his experience and past success in creating value as a director in various companies [7] - Corvex Management, founded by Meister, is a concentrated hedge fund that uses activism as a tool, indicating a potential for strategic influence on Illumina's direction [2][7]