What's At Stake In the Battle for Illumina
Shareholders should reject Francis deSouza and John Thompson on Thursday
What do you do when the chairman and CEO of a company are sent in to make a company take a dive?
There is a future where it’s trivially easy to genetically sequence everything, where Illumina becomes a kind of American equivalent to the very Chinese BGI but only if its leadership changes.
I deal with major governments and U.S. departments all the time and they know that Illumina isn’t currently up to the task of mass sequencing.
The original sin of Francis deSouza was moving Illumina’s leadership from San Diego to San Francisco. In so doing, deSouza made Illumina — the crown jewel of genomics — into just another tech company. Ultimately Illumina’s future will be found in the Washington, DC-area where the government is increasingly spending money on genetics. America can lead the way but only if the world’s largest genomic sequencer happens to be well led.
Over the years I’ve gotten to know a great many people involved with Illumina. They deserve a better CEO than deSouza, who is a charlatan and an interloper.
DeSouza doesn’t know the science. Nor has he bothered to learn it. In one case he plagiarized a presentation verbatim from a subordinate. Increasingly it’s getting harder to hide.
Desouza has been cozy with Microsoft (which has denied contracts), joined a company that was in bed with Huawei (Symantec), palled around with the Bitcoin guy (who has weird ties to China), has a brother and associate running a Chinese battery importer, and he is now with Illumina, but not of Illumina.
The British have Oxford Nanopore while the Chinese have BGI. America needs to clean up Illumina, the world’s largest genomic sequencer, to be internationally competitive.
In much the same way that the security services cleaned up the Chinese involvement and investment in American satellite technology, so too, will we have to clean up Chinese involvement. There’s no better time than with this deal.
In the year before the pandemic the Chinese firm BGI sponsored the American Society of Human Genetics. I was there. It felt like we were on display — and being accessed.
If you were a foreign power you could do little better than have Francis deSouza and his chairman of the board John W. Thompson running Illumina.
Let’s say you had leadership at a company that was essential to your geopolitical rival. You’d put in a compromised board and you’d let it run its course. You’d stay ignorant of the science of the company. The staff would know that you don’t know the science and they would leave.
This compromised board would do precisely as it has been doing.
Fighting the government
Having little vision
And increasing management’s pay
Despite concerns expressed to deSouza about their China country manager Quing Li having control of a lot of Illumina data and IP, deSouza did nothing to check the predatory behavior. Rumors on Li’s treatment of women and some of his business deals are not aligned with Illumina’s global interests. And deSouza ignored the concerns.
Rather than pursue innovation internally, deSouza has preferred acquisition — already a fraught approach with this FTC chair — only deSouza’s acquired the wrong companies, companies connected to his friends or his yes men who were early investors.
During a period of belt tightening deSouza’s Illumina told employees “to do less with less.” Hardly visionary leadership.
Many of the top players have left Illumina.
According to insiders deSouza also abolished the key areas where future growth will drive the company forward. He gutted NEST or the “New emerging strategic and tactical markets” and got rid of ““[a]pplied markets like in the agricultural space.”
DeSouza has real China complications. We’ve written about this before.
DeSouza got his start in the United States with the Media Lab, the Epstein-connected front run by the disgraced Joi Ito.
John W. Thompson, chairman of the board, was Symantec’s CEO from 1999 to 2009. During his time a Chinese computer virus was rampaging and the very Chinese Symantec had the only cure (oddly). (See generally Nicole Perlroth and John Markoff, “Symantec Dissolves a Chinese Alliance,” The New York Times, March 26, 2012.)
Thompson has admitted in interview that his role wasn’t really to serve as a check on the CEO.
Fortunately shareholders can serve as check on both of their behavior and restore Jay Flatley as CEO.
Flatley once held a security clearance. He’ll do nicely.