Fluidigm's Survival Battle: Turnaround in the Midst of a Genomics Revolution

This field-based case uses the challenges facing Fluidigm Corporation, a publicly traded biotechnology company, to explore and analyze innovation-driven growth. Facing a number of headwinds product backorders, strong competition, declining product demand, missed earnings, and an 87% stock collapse over 10 months new CEO Chris Linthwaite needs to devise and share his turnaround strategy with the board of directors. He could recommend launching a new product, reallocating and reprioritizing R&D spend, cutting administrative costs, acquiring a new company or technology, or restructuring the company's capital structure. Which choice will lead to the quickest path back to profitability while driving long-term value creation for its various stakeholders? The case provides an opportunity to explore the tensions between short-run viability and long-run R&D and innovation. Excerpt UVA-S-0339 Rev. Jan. 26, 2021 Fluidigm's Survival Battle: Turnaround in the Midst of a Genomics Revolution Introduction When new CEO Chris Linthwaite sat down at his desk at Fluidigm Corporation (Fluidigm) for the first time in August 2016, he could almost feel the walls burning around him. Fluidigm, a biotechnology company based in south San Francisco, had started out as a promising genomics start-up in 1999 but had experienced rough times in recent years. Following a year of missed earnings in 2015, strong currency headwinds, product backorders, strong competition, and a lag in product demand, the market had finally borne all it could bear, and Fluidigm's stock had collapsed 87% in 10 months, from a high of 43.97 in April 2015 to a low of 5.83 in February 2016 (Exhibit1). Fluidigm was burning through cash and had posted yet another quarter of losses (Exhibits2 and 3). In addition to the street doubting Fluidigm's capabilities, employee morale had plummeted and the company had mounting cash flow issues. In mid-October 2016, more disappointing Q3 results were just about to become public. Fluidigm had missed its earnings again, and Linthwaite was preparing his turnaround strategy to present to his board of directors tomorrow. Recognizing that he had multiple stakeholders to please and many levers he could pull to right the ship, he wondered where he should start. . . .