San Diego's DNA sequencing giant, Illumina told investors this week that it has received outside interest from potential buyers for Grail, the early cancer detection company it acquired in a deal that is tangled in anititrust challenges.
Since Illumina purchased Grail in 2021, the $7.1 billion acquisition has been challenged by U.S. and European regulators over anti-competitive concerns. Additionally, investors were unhappy with the way the deal was handled and how it slashed the company's stock value. Activist investor Carl Icahn led a proxy battle against Illumina earlier this year, which led to the resignation of the biotech's longtime CEO.
Most recently, Europe's antitrust watchdog agency ordered Illumina to divest Grail by next year. The Federal Trade Commission has rejected the merger as anti-competitive, and the deal is being investigated by the Securities and Exchange Commission. Illumina is challenging the FTC divestiture order in federal appellate court.
On Tuesday, Illumina's Chief Financial Officer Joydeep Goswami told investors at the Evercore ISI 6th Annual HealthCONx Conference that it received outside interest in Grail, which was first reported by EndpointsNews. He explained where the company is in the process of exploring a potential outright sale or investment from an outside party.
"It's early in the process, even before the (EU's) divestiture order came out we had received inbound interest in Grail," Goswami said. "But realistically, we are filing (forms) before the end of the year so that kicks off the ability for us to engage with others that have an interest in Grail ... that's the first time we'll know if there's a counterparty and to what extent there's interest in Grail."
If Illumina loses its appeals in the United States or Europe, it will divest Grail. But, if Illumina wins both cases, it will decide whether to integrate Grail or divest some or all of it.
Jacob Thaysen, Illumina's new CEO, said during the company's third-quarter earnings call last month that it is preparing for the different possible outcomes of the Grail deal. He said a special committee has been formed to expedite decisions on Grail, and Illumina has retained special advisers to prepare for a sale or capital market transaction.
Part of this preparation includes filing with the SEC by the end of the year, which would allow the company to field options for a sale or outside investment in Grail.
Illumina did not respond to a request for comment.
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