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Illumina shareholders oust board chair, CEO survives Carl Icahn proxy battle

Rafael Henrique | Lightrocket | Getty Photos

Activist investor Carl Icahn on Thursday received sufficient help from Illumina shareholders to oust the biotech firm’s board chair.

Shareholders booted Chairman John Thompson. An Illumina spokesperson mentioned a brand new chair might be chosen within the subsequent few weeks.

Icahn had urged shareholders to vote off the corporate’s CEO, Francis deSouza, and Thompson from the nine-member board. DeSouza survived the proxy combat.

Shareholders additionally voted to put in one in every of Icahn’s three board nominees, Andrew Teno, a portfolio supervisor at Icahn Capital LP, an entity the place Icahn manages funding funds.

The vote was introduced after Illumina’s annual assembly, marking a decisive finish to a two-month proxy combat between Icahn and the corporate over a controversial acquisition. 

Illumina, in a press release, thanked Thompson for his service over time, saying his govt and enterprise expertise was deeply valued.

Earlier this month, proxy advisory agency Institutional Shareholder Providers beneficial that Illumina shareholders again Teno.

Icahn, who owns a 1.4% stake in San Diego-based Illumina, had proposed two different director candidates who’re his present or former workers.

The vote is a blow to Illumina, which has claimed Icahn’s three nominees lack “related expertise and expertise” and would “threaten the progress” of the biotech firm’s core DNA sequencing enterprise.

Battle over Grail acquisition

Icahn has accused Illumina’s govt administration and board of poor oversight, notably with regard to the corporate’s $7.1 billion acquisition of most cancers check maker Grail in 2021.

He has known as on the corporate to unwind the “absurd and questionable” deal and oust deSouza “instantly.”

Icahn has slammed the chief for receiving a large pay bump regardless of a steep drop within the firm’s market worth. 

Illumina’s market cap has plunged to roughly $33 billion from about $75 billion in August 2021, the month it closed the Grail acquisition. 

A lot of Icahn’s resistance to the deal stems from Illumina’s choice to shut it with out approval from antitrust regulators within the U.S. and Europe.

The Federal Commerce Fee in April ordered Illumina to divest itself of the acquisition over issues that it will stifle competitors and innovation. 

The FTC’s choice reverses an administrative choose’s September ruling, which dismissed the company’s preliminary problem to the deal.

The European Fee, the chief physique of the European Union, additionally blocked the deal final yr over comparable issues.   

Illumina is interesting each orders and expects last choices in late 2023 or early 2024.

The corporate has repeatedly defended its acquisition of Grail. 

CNBC Well being & Science

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DeSouza instructed CNBC final month that the deal “is smart” as a result of Illumina can considerably broaden the marketplace for Grail’s early screening check, which may detect greater than 50 varieties of cancers by a single blood draw. 

The CEO additionally touted Grail’s 100% income progress throughout the first quarter in contrast with the identical interval a yr in the past. 

In 2022, Grail generated round $55 million in income. Illumina expects it to make as much as $110 million this yr. 

Icahn encountered his personal criticism throughout the proxy battle.

Notable quick vendor Hindenburg Analysis accused Icahn Enterprises of being overvalued and likened it to “Ponzi-like financial constructions.”

Icahn Enterprises has known as these claims “deceptive and self-serving.”

CNBC’s Spencer Kimball contributed to this report.

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