Commercial Illumina Decides to Spin Off Grail

Illumina Decides to Spin Off Grail

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An end is drawing close for Illumina’s multibillion-dollar pursuit of Grail. The company has devised a strategy to spin out the cancer blood test firm as a separate, independently operating business. The firm’s board of directors has greenlit the proposal for Grail to join the Nasdaq by the end of this month under the ticker symbol ‘GRAL’.

Illumina CEO Jacob Thaysen stated, “Today’s announcement marks a milestone for Illumina and signals an important step forward for the company since the divestiture of Grail is one of our 2024 priorities.”

Almost ten years ago, Grail was first conceived as a spinoff of Illumina. This was the beginning of its winding path. The firm secured over $2 billion in venture capital to support the advancement of its Galleri multicancer early detection test. This test has been designed to detect over 50 different types of cancer from a single blood sample. Additionally, it can verify the effectiveness of the test in comprehensive clinical studies.

Illumina disclosed its intention to bring Grail back under its ownership in September 2020 via a proposed acquisition of its remaining investment in the firm, valued at $8 billion. Less than a year later, while under scrutiny from antitrust regulators in the U.S. and Europe, Illumina announced its intention to proceed with and finalize the deal.

The Federal Trade Commission (FTC) and the competition regulator of the European Union (EU) expressed disagreement with that decision. The EU regulator imposed a historic punishment of 432 million euros on Illumina and mandated that the firm revoke its ownership. In April 2023, the FTC issued its own order as a follow-up.

As legal lawsuits and challenges unfolded on both sides of the Atlantic, Illumina faced another obstacle in the form of a proxy struggle with activist investor Carl Icahn.

After seeing a decrease in its stock price, the billionaire demanded a shift in the leadership of Illumina. As a result, CEO Francis deSouza resigned, and board chair John Thompson also stepped down. Icahn eventually filed a lawsuit against Illumina, demanding the replacement of the remaining members of the board.

In October, the European Commission issued an official order to Illumina, instructing it to sever its relationship with Grail. Illumina was given the option to either separate the company again or sell it completely. The directive also required Illumina to restore the competitive atmosphere that existed before the transaction took place.

This meant offering Grail financial support equivalent to two and a half years’ worth of money, anticipated to be around $1 billion based on its operational plan.

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