Illumina’s divestment of Grail creeps closer

Less than three weeks after surviving a leadership challenge, Illumina’s Francis deSouza has resigned as chief executive. The move makes the unwinding of Illumina’s contested $8bn acquisition of liquid biopsy maker Grail much more likely. deSouza was one of the main proponents of the Grail deal, which some felt never made a great deal of sense even before Illumina closed it without first getting regulatory approval. Both the US FTC and the European Commission have told Illumina to unwind the deal on the grounds that it is anticompetitive. Illumina is appealing both decisions, but has suffered badly: its market capitalisation slumped from around $80bn when it closed the Grail deal to around $50bn in mid-March this year. This prompted the activist investor Carl Icahn, who has a 1.4% stake in Illumina, to mount a proxy battle; he now has one nominee on the beleaguered group's board. Illumina’s market cap now sits at just $32bn. Following deSouza’s departure the questions will be how much of this lost value can be recouped, and whether this is best done via selling Grail or spinning it off.