A constructing on the campus on the world headquarters of Illumina is proven in San Diego, California, September 1, 2021.
Mike Blake | Reuters
The Securities and Exchange Commission is investigating Illumina over its controversial $7.1 billion acquisition of cancer test developer Grail, the DNA sequencing firm stated in a securities filing late Thursday.
Last month, the SEC knowledgeable Illumina in regards to the probe and requested paperwork and communications associated to the deal. The company additionally requested for statements and disclosures in regards to the “conduct and compensation” of sure members of each Illumina and Grail’s administration, based on the submitting.
Illumina, within the submitting, stated it’s cooperating with the SEC. An company spokesperson didn’t instantly reply to CNBC’s request for touch upon the investigation.
Shares of Illumina fell about 4% on Friday.
The SEC’s probe solely places extra strain on Illumina, which has misplaced nice sums of cash since closing the deal in August 2021. The firm’s market worth has fallen to roughly $28 billion from round $75 billion the month the deal closed.
Illumina’s Grail deal has additionally confronted heavy scrutiny from antitrust regulators within the U.S. and European Union.
The European Commission, the EU’s govt physique, fined Illumina a report $476 million final month for closing the acquisition with out first securing regulatory approval.
The fantastic got here after the fee blocked the deal in September over issues it will stifle innovation and shopper selection within the rising marketplace for cancer detection assessments.
Illumina has appealed the European Commission’s choice, arguing that the physique lacks jurisdiction to dam the merger between the 2 U.S. corporations.
Illumina expects a remaining choice on an enchantment in late 2023 or early 2024. That’s additionally when the corporate anticipates it’s going to hear an consequence of its enchantment of a similar order by the U.S. Federal Trade Commission.
Illumina has stated it’s going to divest Grail if it loses both enchantment.
Illumina’s willpower to maintain Grail sparked a heated proxy showdown with activist investor Carl Icahn, who holds a 1.4% stake within the firm. Much of Icahn’s opposition stemmed from Illumina’s choice to shut the acquisition with out gaining approval from antitrust regulators.
Illumina believes it could actually increase the supply, affordability and profitability of Grail’s Galleri test, which may display screen for greater than 50 sorts of cancers via a single blood draw.
