Illumina appeal of FTC Grail order is ‘an almost impossible battle’

Carl Icahn on Wednesday stated Illumina‘s efforts to enchantment a Federal Trade Commission order to divest the extremely contested Grail acquisition “is an virtually inconceivable battle.” 

Illumina on Monday advised CNBC it intends to enchantment the FTC’s order in federal courtroom, and can search an expedited choice. That enchantment will come “at nice expense” to the DNA sequencing firm, the activist investor argued in his newest open letter to shareholders.

“Our main concern as a big shareholder is that this multi-year battle will eat hordes of money and go on for years, luxuries that Illumina doesn’t have,” Icahn, who owns a 1.4% stake in Illumina, wrote. 

The corporate’s market worth has already fallen to roughly $36 billion from about $75 billion in August 2021, the month it closed its acquisition of most cancers check developer Grail. 

Icahn launched a proxy battle over the Grail deal final month, looking for seats on Illumina’s board of administrators and pushing the corporate to unwind the deal. He shares widespread floor with the FTC, which argued in its order that the $7.1 billion deal would stifle competitors and innovation. 

The FTC’s order reverses an administrative choose’s September ruling, which dismissed the fee’s preliminary problem to the Grail deal. 

In his letter, Icahn highlighted Illumina’s “lengthy historical past” of interesting regulatory challenges to the acquisition.

The corporate final yr appealed an identical order by European Union regulators to unwind the Grail deal. The EU’s government physique, the European Fee, in September blocked Illumina’s acquisition over issues that it will damage client selection and innovation.

San Diego-based Illumina expects a choice on its enchantment of the European Fee and FTC orders in late 2023 or early 2024. 

The corporate on Wednesday stated in a press release to CNBC that it has a “robust case on enchantment” of the FTC’s order. It pointed to the way it prevailed over the fee final yr. 

Illumina additionally pushed again on the newest order. 

“The FTC’s choice runs afoul of authorized precedent and is inconsistent with the overwhelming proof that reuniting Illumina and GRAIL will promote competitors and save lives,” Illumina advised CNBC. 

Shares of Illumina closed comparatively flat Wednesday afternoon.

Icahn on Wednesday took extra photographs at Illumina’s CEO Francis deSouza after ratcheting up criticism of the chief — and his pay raise — final week.

The investor claimed deSouza “allowed our probably nice firm to deteriorate.

“His shareholder-funded GRAIL journey is a determined ‘Hail Mary’ energy seize to aim to reverse the declining fortunes of Illumina,” Icahn wrote.

He added that the Grail deal is deSouza’s “second main M&A failure” since he stepped in as CEO in 2016. In 2020, Illumina called off a $1.2 billion merger with Pacific Biosciences of California after the FTC challenged the acquisition.

Icahn repeated his name on Illumina to interchange deSouza with the corporate’s former CEO Jay Flatley or “another person on his degree.”

Final week, Icahn said the corporate wants “somebody who is aware of what they’re doing to repair the state of affairs.”