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Tag: Illumina Inc

  • Illumina acquisition of Grail wins support from GOP lawmakers, state AGs as FTC tries to block it

    Illumina acquisition of Grail wins support from GOP lawmakers, state AGs as FTC tries to block it

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    Rafael Henrique | Lightrocket | Getty Images

    Republican lawmakers, state attorneys general and several advocacy groups have voiced their support for Illumina’s acquisition of cancer-test developer Grail while the Federal Trade Commission fights to unwind the deal. 

    The groups filed 14 amicus briefs Monday urging the U.S. 5th Circuit Court of Appeals to reverse an FTC order that would have Illumina undo the $7.1 billion Grail deal over concerns that it stifles competition. Last week, the San Diego-based DNA-sequencing company appealed the agency’s ruling.

    Proponents of the deal argued in the court filings that the FTC overstepped its authority in trying to unwind the tie-up that closed nearly two years ago. They added that blocking the companies from merging could harm the development of life-saving technology.

    “Unaccountable federal agency power undermines liberty, and overzealous, unfair agency enforcement impedes technological advancements benefitting citizens’ wellbeing,” attorneys general from 12 states said in one of the briefs. 

    Those states are Alaska, Arkansas, Georgia, Idaho, Indiana, Iowa, Kentucky, Louisiana, Nebraska, South Carolina, Utah and Virginia. 

    Thirty-four Republican lawmakers touted Grail’s early screening test, which can detect more than 50 types of cancers through a single blood draw. The test isn’t approved by the Food and Drug Administration, but it has raked in limited sales over the past year.

    Grail needs Illumina to obtain regulatory approval and commercialize production of the test, which are “required steps to delivering the full benefits of these tests to the public and detecting cancer as quickly as possible,” the lawmakers argued. 

    The FTC declined to comment on the filings.  

    The deal has faced broad opposition. Last year, the European Union’s executive body, the European Commission, blocked the acquisition citing similar competition concerns. Illumina has appealed that order. 

    And activist investor Carl Icahn, who holds a 1.4% stake in Illumina, launched a proxy fight with the company over the Grail deal. 

    Illumina shareholders voted to oust the chair of its board late last month. Company CEO Francis deSouza stepped down on Sunday after weeks of harsh backlash from Icahn.

    Icahn’s opposition stemmed from Illumina’s decision to close the acquisition without first gaining approval from antitrust regulators.

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  • Illumina shareholders vote to elect one of Carl Icahn’s candidates to its board after proxy fight

    Illumina shareholders vote to elect one of Carl Icahn’s candidates to its board after proxy fight

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    Illumina Inc.
    ILMN,
    -9.08%
    shareholders voted Thursday to elect one of activist investor Carl Icahn’s nominees to its board, and voted against the re-election of company Chairman John Thompson, according to media reports on Thursday. The genomics company has been engaged in a proxy battle with Icahn since March, who was seeking to unseat its chairman and chief executive and add three of his own candidates to the board. Illumina had blasted back that Icahn’s board nominees were “unqualified,” urging shareholders to reject all three and instead support its “highly qualified” nominees. Icahn had said that Chief Executive Francis de Souza and other “protectors” seem “dead set on destroying the company.” Illumina had defended its own track record. “Illumina is the only pure-play genomics company with profitable revenue growth,” it said in an early May statement. Icahn started the proxy fight with Illumina in March, criticizing the company’s plan to buy cancer-screening company Grail Inc. But Icahn himself is in a weakened position, under fire from a recent report from short seller Hindenburg Research accusing the firm of inflating asset values and causing his company to trade at a large premium. The report has cost IEP $10.9 billion in lost market cap since it was published on May 2. Last week, the storied investor admitted he was wrong to take a huge short position that led to losses of $9 billion. And earlier this month, IEP disclosed a federal probe into its corporate governance and other issues. It’s not clear if that was related to the Hindenburg report.

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  • Carl Icahn calls Illumina Q1 results ‘very disappointing,’ slams cost-cutting plan

    Carl Icahn calls Illumina Q1 results ‘very disappointing,’ slams cost-cutting plan

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    Carl Icahn speaking at Delivering Alpha in New York on Sept. 13, 2016.

    David A. Grogan | CNBC

    Carl Icahn on Friday called Illumina’s first-quarter results “very disappointing” and slammed the DNA sequencing company’s new plans to cut costs. 

    The activist investor, who owns a 1.4% stake in Illumina, is in a heated proxy fight with the company over its 2021 acquisition of cancer test developer Grail.

    Icahn and Illumina have been trading jabs for more than a month. 

    Icahn is seeking seats on Illumina’s board of directors and pushing the company to unwind the Grail acquisition. He is also calling for the San Diego-based company to oust CEO Francis deSouza “immediately.”

    Illumina on Tuesday reported quarterly revenue and earnings that topped Wall Street’s expectations.

    But the company also posted net income of $3 million for the quarter, which was down more than 96% from the $86 million it raked in during the same period a year ago. 

    In an open letter Friday to Illumina shareholders, Icahn accused deSouza of “desperately, hilariously and, most of all, unsuccessfully” trying to spin the “decidedly mediocre” quarterly results during a press tour this week.

    Icahn pointed to deSouza’s interview on CNBC’s “Squawk Box” on Wednesday, when the CEO touted strong demand for Illumina’s diagnostic testing services.  

    “Illumina CEO Francis deSouza seems to believe that he can fool all of the people all of the time,” Icahn wrote. 

    “Those not skilled in deciphering doublespeak might actually get the impression that Illumina was doing well!” he added.

    Icahn also said that the price of Illumina shares fell the more its CEO during this week, “clearly signaling dissatisfaction with the earnings report and dissatisfaction with Mr. deSouza’s transparent attempt to put lipstick on a pig.” 

    Illumina’s stock is down more than 10% since the company reported earnings. Shares closed largely flat Friday after Icahn released his letter.

    In that missive, Icahn also took shots at cost-cutting plans Illumina unveiled to improve its shrinking margins. He called those measures “vague” and “extraordinarily unambitious.”

    The company on Tuesday said it will enable unnamed “activities” in more cost-effective areas of the world and will use its new NovaSeq X sequencing system to accelerate genomic discoveries, among other efforts. 

    Those plans will help Illumina reach its adjusted operating margin goals of 24% in 2024 and 27% in 2025, the company said in its earnings release. 

    Icahn called those margin targets “less than modest.” And he argued that they will “take years to realize, if they are achieved at all.” 

    The company has projected an estimated 22% operating margin for 2023, down from the 23.8% it reported in 2022.

    Illumina reported a negative operating margin of 5.7% for the quarter, down from 15% during the same period a year ago. The company’s gross margins for the period fell to 60.3%, down from 66.6% in the first quarter of 2022.

    Illumina did not immediately respond to a request for comment on Icahn’s letter.

    Criticism of Grail deal

    Elsewhere in his letter, Icahn slammed deSouza’s positive remarks this week about Illumina’s $7.1 billion acquisition of Grail.

    DeSouza had told CNBC the deal “makes sense” because Illumina can significantly expand the market for Grail’s early screening test for different types of cancer.

    The CEO also touted Grail’s 100% revenue growth during the quarter compared with the same period a year ago. 

    But Icahn said the deSouza failed to tell the public about an opinion issued earlier this month by the Federal Trade Commission, which said that the deal would stifle competition and innovation. 

    The FTC also ordered Illumina to divest itself of the acquisition over those concerns. 

    The European Commission, the executive body of the European Union, also blocked the deal last year over similar concerns.   

    Illumina is appealing both orders and expects final decisions in late 2023 or early 2024.

    Last week, a U.S. federal appeals court said that it will fast-track its review of Illumina’s challenge of the FTC order.

    Icahn’s resistance to the acquisition stems from Illumina’s decision to close the deal without getting approval from those antitrust regulators.

    Earlier this month he strongly criticized Illumina and its management for finalizing the “reckless deal,” calling it “a new low in corporate governance.” 

    Illumina has urged shareholders to reject Icahn’s three board nominees during its annual shareholder meeting scheduled for May 25. 

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  • Jim Cramer says these 5 Nasdaq losers could rebound in 2023

    Jim Cramer says these 5 Nasdaq losers could rebound in 2023

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    CNBC’s Jim Cramer on Friday named four stocks that he believes could mount a comeback this year.

    To come up with his picks, he parsed through last year’s worst-performing stocks listed in the Nasdaq 100. 

    “Out of the Nasdaq’s biggest losers, I think Qualcomm, Lam Research, Micron, and Airbnb will work this year, although not necessarily the first half,” he said, adding, “and don’t forget Illumina.”

    Here are his thoughts on each stock:

    Qualcomm

    • Cramer said that while Wall Street expects the semiconductor company to start losing iPhone orders in 2024, it’s possible the company could hold to at least some of those orders due. The company’s push into the auto market should also help the stock, he added.

    Lam Research

    • He acknowledged that the near future could be ugly for chipmakers. However, “you can’t afford to wait around too long after this next bad quarter, because Lam’s stock will bottom months before the business does,” he said.

    Micron

    • He advised investors to wait several months to buy shares of Micron, but make sure to do so before the chip glut is over. “Once there’s any sign of a bottom, this thing will bounce back like crazy — always has,” he said.

    Airbnb

    • Cramer said that the company should continue to make money this year thanks to the current travel boom. Investors interested in the stock should buy it gradually on the way down, he added.

    Illumina

    • He said that while the company is “superb,” he’d rather own shares of Danaher than Illumina.

    Disclaimer: Cramer’s Charitable Trust owns shares of Qualcomm and Danaher.

    Jim Cramer says these 5 Nasdaq losers could rebound in 2023

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