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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 shall 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 struggle.
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 fight between Icahn and the corporate over a controversial acquisition.
Illumina, in an announcement, thanked Thompson for his service over time, saying his government and enterprise expertise was deeply valued.
Earlier this month, proxy advisory agency Institutional Shareholder Services recommended 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 staff.
The vote is a blow to Illumina, which has claimed Icahn’s three nominees lack “related abilities 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 government administration and board of poor oversight, significantly with regard to the corporate’s $7.1 billion acquisition of most cancers take a look at maker Grail in 2021.
He has referred to as on the corporate to unwind the “absurd and questionable” deal and oust deSouza “instantly.”
Icahn has slammed the manager for receiving a massive 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.
Much of Icahn’s resistance to the deal stems from Illumina’s determination to shut it with out approval from antitrust regulators within the U.S. and Europe.
The Federal Trade Commission in April ordered Illumina to divest itself of the acquisition over issues that it might stifle competitors and innovation.
The FTC’s determination reverses an administrative decide’s September ruling, which dismissed the company’s preliminary problem to the deal.
The European Commission, the manager physique of the European Union, additionally blocked the deal final 12 months over comparable issues.
Illumina is interesting each orders and expects closing choices in late 2023 or early 2024.
The firm has repeatedly defended its acquisition of Grail.
DeSouza advised CNBC final month that the deal “is smart” as a result of Illumina can considerably increase the marketplace for Grail’s early screening test, which might detect greater than 50 forms of cancers via a single blood draw.
The CEO additionally touted Grail’s 100% revenue growth in the course of the first quarter in contrast with the identical interval a 12 months in the past.
In 2022, Grail generated round $55 million in income. Illumina expects it to make as much as $110 million this 12 months.
Icahn encountered his personal criticism in the course of the proxy battle.
Notable brief vendor Hindenburg Research accused Icahn Enterprises of being overvalued and likened it to “Ponzi-like financial constructions.”
Icahn Enterprises has referred to as these claims “deceptive and self-serving.”
— CNBC’s Spencer Kimball contributed to this report.
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