USA —San Diego-based biotech company, Illumina, has pushed back against Carl Icahn’s criticism of its acquisition of cancer test developer Grail, stating that his proposed board nominees “do not add value.”
The company asserts that it remains committed to maximizing shareholder value and is working with antitrust regulators to expedite Grail’s path forward.
Icahn, who owns a 1.4% stake in Illumina, has accused the company of overpaying for Grail and completing the deal without obtaining European antitrust regulatory approval, resulting in the loss of US$50 billion in Illumina’s market value.
He has also announced his intention to nominate three members to Illumina’s board during the upcoming annual meeting of shareholders.
In response, Illumina has emphasized its ongoing efforts to address regulatory opposition to the acquisition.
The European Commission had blocked the deal last year, citing concerns about consumer choice, and could force Illumina to unwind the deal, potentially resulting in a fine of up to 10% of Illumina’s annual revenues.
Despite Icahn’s criticism, Illumina maintains that its acquisition of Grail will ultimately benefit its shareholders and advance its mission to improve human health through genomics.
Illumina has challenged the European Commission’s jurisdiction to block its merger with Grail, arguing that a decision on the matter is expected in late 2023 or early 2024.
Illumina believes that winning the jurisdictional appeal would eliminate any potential fine and provide the greatest optionality to maximize shareholder value.
In response to Carl Icahn’s criticism of the merger, Illumina stated that the billionaire investor recognizes the value of Grail to shareholders, but has not offered ideas for a “rapid resolution” for Grail.
Illumina also claimed that Icahn’s proposed nominees to the board lack relevant skills and experience, and have no ability to accelerate the legal and regulatory processes.
Illumina highlighted Grail’s long-term value creation potential, including its commercially available early screening test that can detect over 50 types of cancers through a single blood draw.
The test generated US$55 million of revenue in 2022 and is expected to bring in up to US$110 million this year.
The U.K.’s National Health Service is currently conducting a study with 140,000 participants to research the test, and if successful, expects to test one million people in the U.K. in 2024.
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