Illumina signs new US$750M credit agreement with Bank of America to facilitate operations

USA — Illumina, a leading maker of high-speed genomic sequencing systems has entered into a five-year revolving credit agreement with Bank of America for US$750 million to finance its working capital needs and for general corporate purposes.

The agreement replaces a US$750 million credit facility secured by Illumina from Bank of America in 2021. The majority of the publicly disclosed terms of the agreements are identical.

One of the options for setting the variable interest rate is now the “term secured overnight financing rate,” not the “eurocurrency,” and “a credit spread adjustment equal to 0.10% per annum” will apply to loans bearing interest based on the new option.

Other changes include moving the payment deadline from March 8, 2026, to January 4, 2028, and updating information about the bankers on the other side of the transaction.

The credit agreement comes after a year in which Illumina’s share price dropped by 45%, briefly falling below US$190 over the holidays before rebounding to above US$200 in the new year.

Illumina’s stock price fell as investors worried about the Grail acquisition and broader macroeconomic pressures on the company.

The new funding comes as European regulators seek to cancel Illumina’s takeover of Grail, and as a global economic downturn has harmed investor confidence in the company, pushing its share price below US$200 for the first time since 2017.

Antitrust regulators contend that Illumina, whose sequencers are used by companies, hospitals, and research institutions, may unfairly favor Grail in the race to develop tests for the early detection of multiple types of cancer.

Illumina may raise prices or withhold technology that competing test developers require to thrive.

In court documents, competition enforcers cite Grail rivals’ concerns about being harmed by the tie-up. Exact Sciences Corp and six other companies testified in court in the United States that they used Illumina’s system.

They claimed that the Illumina system is more advanced than others and that switching would be too costly.

Simultaneously, Grail is the only company on the market with a blood test designed to detect multiple early-stage cancers, giving it a first-mover advantage with doctors prescribing the tests.

However, it lacks regulatory approval and will most likely require a lot more data to prove its effectiveness.

Early cancer detection tests, if successful, could help doctors identify cancer risk in patients long before symptoms or other indicators appear.

Different approaches to cancer detection

Several of the leading contenders approach cancer detection in vastly different ways, and it is unclear which methods will be most useful or when.

Large, long-term clinical trials are also required, according to experts, to demonstrate that the tests can benefit patients.

Thermo Fisher Scientific Inc, Ultima Genomics Inc, and 10x Genomics all make sequencing systems that compete with Illumina.

Each group pursuing a test takes a unique approach. Grail’s Galleri test scans blood samples for patterns of chemical changes associated with specific cancers using genetic sequencing and artificial intelligence.

Delfi Diagnostics Inc analyzes cancer DNA in the blood using machine learning and is focused on early detection of only a few common cancers such as lung cancer.

Guardant Health has been developing a blood test that uses a combination of DNA alterations and other biomarkers to detect colorectal cancer.

Other cancer test developers do not rely at all on gene sequencing. Some researchers are developing blood tests to detect various early cancer markers, including proteins.

Researchers believe that until evidence proves that early detection is feasible, tests may come and go, with companies selling them to paying patients while trials are ongoing.

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