Francis deSouza resigned from Illumina’s helm after strong campaigning from activist investor Carl Icahn and the ongoing regulatory roadblocks facing the company’s acquisition of GRAIL.
Pictured: Illumina sign on a building/Courtesy of Illumina
Sunday, Illumina announced its CEO, Francis deSouza, was stepping down from the helm. Current senior vice president and general counsel Charles Dadswell will act as the company’s head in the interim.
DeSouza’s resignation is effective immediately, but he will remain with the company as an advisor until July 31. Meanwhile, Illumina’s board is looking both within and outside the company for deSouza’s replacement, “who can drive advancements in healthcare, growth and shareholder value,” the press announcement read.
The news comes months after activist investor Carl Icahn tried to place three of his representatives on Illumina’s board ahead of the company’s annual shareholder meeting last month. In his pitch, Icahn pointed to deSouza’s and the incumbent board’s failure “to take actions to maximize value for the company’s stockholders.”
In particular, Icahn pointed to Illumina’s 2020 acquisition of cancer detection company GRAIL, for which it put $7.1 billion on the line. The deal has faced several regulatory roadblocks due to potential anti-trust issues. In March 2021, the Federal Trade Commission filed a complaint to block the buyout, claiming that if it pushes through, “the acquisition would substantially lessen competition in the U.S. multi-cancer early detection (MCED) test market.”
Soon after, the EU’s European Commission launched its own investigation into the matter. In September 2022, the Commission vetoed the GRAIL buyout and forced Illumina to divest the cancer detection company.
In March 2023, the FTC also found that the acquisition, which had already been completed at the time, was indeed in violation of anti-trust policies and was, therefore, unlawful. The federal body ordered Illumina to divest GRAIL.
Icahn latched onto this in his bid to get representatives elected, pointing to the board’s “reckless decision to close the GRAIL transaction” despite mounting objections by regulators.
In turn, this has led to a situation where “Illumina is forced to pay for the ongoing operations of GRAIL without the ability to integrate GRAIL into Illumina’s operations and therefore cannot realize any synergies or cost savings from the acquisition,” Icahn said.
In response to Icahn’s allegations, Illumina’s leadership released its own series of letters in which it reaffirmed its commitment to providing shareholder value, underlined the superiority of its board candidates versus Icahn’s and highlighted weaknesses in Icahn’s plan.
Preliminary results from the annual meeting, posted May 2023, showed that eight of nine board nominees won seats. Only one of Icahn’s hopefuls was elected.
Tristan Manalac is an independent science writer based in metro Manila, Philippines. He can be reached at tristan@tristanmanalac.com or tristan.manalac@biospace.com.
