Dive Brief:
- Illumina moved a step closer to unwinding its 2021 acquisition of liquid biopsy unit Grail with the submission of a confidential draft registration statement on Form 10 to the U.S. Securities and Exchange Commission.
- The provider of next-generation sequencing (NGS) platforms, under orders from antitrust regulators in the U.S. and Europe to divest Grail after completing the $8 billion acquisition prematurely, said it continues to pursue a two-track approach to resolving Grail’s fate.
- “We’re preparing to divest while continuing to appeal in the US and the EU,” Illumina spokesperson David McAlpine said in an email.
Dive Insight:
Filing the registration statement paves the way for Illumina to issue securities for potential trading on U.S. exchanges. A capital markets transaction or sale of the business to a third party are among the options that Illumina is allowed to consider under the terms of the European Commission’s divestiture order.
CEO Jacob Thaysen, who joined Illumina in September from Agilent Technologies, said on the company’s earnings call in November that it is preparing for both potential sale and capital markets transactions.
Illumina, in a press release Monday, said it is evaluating divestiture options with the intent of getting the best value for shareholders and outcome for Grail.
Still, Illumina maintains that the EC does not have jurisdiction over the Grail acquisition. If the company wins its challenge in a case now before the European Court of Justice, the basis for the EC's divestiture order would be eliminated, the company said.
The Federal Trade Commission has also ordered Illumina to divest Grail, after determining that the merger would reduce innovation and competition in the U.S. market for life-saving cancer tests. Grail’s Galleri blood test screens for multiple types of cancer in asymptomatic patients using DNA sequencing, and Illumina is the dominant supplier of NGS platforms used in multi-cancer early detection testing.
If Illumina fails to win the jurisdictional challenge in Europe or a favorable decision in its case in the U.S. Fifth Circuit Court of Appeals, the company said it will divest Grail.
Thaysen last month announced that he had formed a special committee to speed decisions on the future of Grail and that Illumina would be in contact with investment capital sources or potential acquirers. The company faces stiff penalties imposed by the EC and a 12-month timeline to divest Grail that began in October.
The new CEO stepped into the role following the resignation of Francis deSouza after a proxy fight led by activist investor Carl Icahn that saw Illumina shareholders oust board Chair John Thompson.
