Illumina Installs Carl Icahn Board Nominee, Ousts Chairman

Activist investor Carl Icahn on Thursday got enough support from Illuminated shareholders to install one of its three candidates on the biotechnology company’s board of directors.

Shareholders also ousted board chairman John Thompson.

The vote was announced after Illumina’s annual meeting, marking the decisive end to a two-month proxy battle between Icahn and the company over a controversial acquisition.

Shareholders voted to install Andrew Teno, portfolio manager at Icahn Capital LP, an entity where Icahn manages investment funds.

Earlier this month, proxy advisory firm Institutional Shareholder Services recommended that Illumina shareholders support Teno.

Icahn, who owns a 1.4% stake in San Diego-based Illumina, had nominated two other director nominees who are his current or former employees.

He also urged shareholders to elect company CEO Francis deSouza and chairman John Thompson of the nine-member board.

The vote is a blow to Illumina, which claimed Icahn’s three nominees lack “relevant skills and experience” and “threaten the progress” of the biotech company’s core DNA sequencing business. .

Icahn accused Illumina’s executive leadership and nine-member board of poor oversight, particularly with respect to the company Acquisition of $7.1 billion from cancer test maker Grail in 2021.

He called on the company to untie the “absurd and dubious” deal and oust its CEO Francis deSouza “immediately”.

Icahn criticized the executive for receiving a massive pay raise despite a sharp drop in the company’s market value.

Illumina’s market capitalization plunged to around $33 billion, from around $75 billion in August 2021, the month it closed the Grail acquisition.

Much of Icahn’s resistance to the deal stems from Illumina’s decision to close it without the approval of antitrust regulators in the United States and Europe.

In April, the Federal Trade Commission ordered Illumina to divest itself of the acquisition, fearing it would stifle competition and innovation.

FTC ruling overturns administrative judge’s ruling September decision, which dismissed the agency’s initial challenge to the deal.

The European Commission, the European Union’s executive body, also blocked the deal last year for similar reasons.

Illumina is appealing both orders and awaiting final decisions in late 2023 or early 2024.

The company has repeatedly defended its acquisition of Grail.

DeSouza told CNBC last month that the deal “makes sense” because Illumina can significantly expand Grail’s market. early detection testwhich can detect more than 50 types of cancer with a single blood test.

The CEO also touted Grail’s 100% revenue growth in the first quarter compared to the same period a year ago.

In 2022, Grail generated approximately $55 million in revenue. Illumina expects it to bring in as much as $110 million this year.

Icahn faced his own criticism during the proxy battle.

Notable short seller Hindenburg Research accused Icahn Enterprises of being overvalued and likened it to “Ponzi-like economic structures”.

Icahn Enterprises called these claims “misleading and self-serving”.