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Illumina to part with Grail, ending battle with regulators

Dive Brief:

  • DNA sequencing company Illumina said Sunday it will divest Grail, the liquid biopsy maker it fought to hang onto after purchasing the business for $8 billion more than two years ago over the objections of U.S. and European regulators.
  • The divestiture will take the form of a capital markets transaction or sale of the unit to a third party, consistent with the European Commission’s divestiture order, Illumina said in its announcement. The company aims to finalize terms by the end of the second quarter of 2024.
  • Illumina’s plan to unwind its Grail acquisition follows a decision by the U.S. Fifth Circuit Court of Appeals, issued Friday, in which the San Diego-based company’s case against the U.S. Federal Trade Commission was remanded for reconsideration. However, Illumina is still moving forward with the divestiture. “Following a review of the Court’s opinion, Illumina has elected not to pursue further appeals of the Fifth Circuit’s decision,” Illumina said. 

Dive Insight:

The decision to divest Grail brings Illumina closer to the end of a protracted battle with regulators and activist investor Carl Icahn that ultimately saw John Thompson, the company’s board chair, ousted in a proxy contest and the subsequent resignation of CEO Francis deSouza.

Illumina closed the Grail acquisition in August 2021 without first gaining the European Commission’s approval, leading to a 432 million euro fine imposed on the company for intentionally breaching EU merger rules.

Regulators in both the U.S. and Europe said the acquisition could stifle competition in the market for multi-cancer early detection, or MCED, tests. Illumina is the dominant producer of next-generation sequencing platforms, which are used to analyze genetic material from the blood samples drawn for MCED tests.

Earlier this year, Icahn launched a proxy fight that resulted in one of his employees winning a seat on Illumina’s board.

In a letter to fellow shareholders on Monday, Icahn said he would continue to push for change at Illumina, after filing a lawsuit against the company in October that seeks the removal of several Illumina directors and damages of at least $476 million, the amount the European Commission fined Illumina for the Grail takeover, and other legal fees.

Icahn, in the shareholder letter, again called for the removal of Illumina’s “legacy conflicted” directors, while expressing support for the company’s new chief executive. 

Jacob Thaysen, who was named CEO of Illumina in September, said in a statement: “We are committed to an expeditious divestiture of Grail in a manner that allows its technology to continue benefiting patients. The management team and I continue to focus on our core business and supporting our customers. I am confident in Illumina’s opportunities and our long-term success.”


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