MetaMedical™ Solutions Inc

Signal: Illumina may be on its way to divest Grail, but legal trouble looms

Diagnostics giant Illumina could seek an outright sale of Grail, a cancer detection test manufacturer.

In an interview on 28 November with Evercore ISI, Illumina’s CFO Joydeep Goswami revealed that the company plans to file a Form 10 by the end of this year, which will allow Illumina to “engage with others who have an interest in grail either through […] a sponsorship and a spend solution or an outright sale”.

Grail has been a thorn in Illumina’s side since the latter acquired it in 2021 in contravention of the Federal Trade Commission (FTC) and European Commission, which has since required the company to be divested. The news that there is outside interest, first reported by Endpoints News, could help the firm recover some of the credibility that has been lost through a series of legal battles over the past two years.

If Illumina is not able to successfully appeal the divesture order, which appears unlikely given the way in which the European Commission responded to Illumina’s initial move, it will have to get rid of Grail by October 2024. Goswami downplayed potential scepticism by the market over an asset that has cost the company so much, telling his interviewer that “there is interest in what Grail brings to the market, what Grail brings in its leadership in the MCED space,” though was careful to caveat that he didn’t want to jump the gun on an announcement.

Class action

Illumina’s fortunes are not looking up yet, though. Already facing down a lawsuit by activist investor Carl Icahn over the deal, three separate law firms encouraged investors to join the suit as lead plaintiffs on 28 November. The firms – Pomerantz LLP, Portnoy Law and Bronstein, Gewirtz & Grossman – all specialise in class actions on behalf of investors.

This is likely to increase the pressure on Illumina; whether or not these firms are successful in growing the suit, the fact that they are putting the call out means that they believe the case has a reasonable chance of success.

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By GlobalData

This legal trouble hasn’t stopped the company from hiring, however. GlobalData analytics indicate that the company posted over 100 new jobs in September.

Our signals coverage is powered by GlobalData’s Thematic Engine, which tags millions of data items across six alternative datasets — patents, jobs, deals, company filings, social media mentions and news — to themes, sectors and companies. These signals enhance our predictive capabilities, helping us to identify the most disruptive threats across each of the sectors we cover and the companies best placed to succeed.

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