Illumina Grail purchase investigation: The SEC is investigating Illumina’s controversial $7.1 billion purchase of cancer diagnostic company Grail, according to a recent SEC filing. Illumina is buying Grail because buyers think Illumina misrepresented about the benefits.
The SEC informed Illumina of the probe one month ago and requested documents, emails, and information about the “conduct and compensation” of Illumina and Grail leaders. SEC noticed. This concerned Illumina, which interested the SEC. This piqued the SEC. The request included a message suggesting the probe had already begun.
Illumina reported interacting with the SEC. This makes the company seem helpful. The company’s stock plunged 4% on Friday when this news was released.
Illumina has suffered massive financial losses since the August 2021 Grail purchase. This investigation complicates a difficult situation. That’s worse. After the recent economic crisis, the market value, which was over $75 billion when the purchase was completed, decreased to roughly $28 billion. The sale closed at around $75 billion. The transaction produced this massive value decline.
Illumina’s Grail project still faces many legal hurdles. US and EU antitrust regulators monitored the deal throughout the process. The European Commission fined Illumina $476 million this month for rushing to close the purchase without regulator approval. This happened across the Atlantic. Illumina was fined for completing the purchase without government approval.
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The European Commission runs the EU’s executive branch daily. After the commission stopped the purchase in September, this punishment was granted due to concerns that it could restrict innovation and limit customer choice in the rapidly growing cancer detection tests industry. To be more explicit, it could prevent fresh ideas and limit client options.
Illumina remains determined. It’s evaluating the European Commission’s decision instead. The corporation believes the commission cannot ban the two US-based companies from joining. By late 2023 or early 2024, this appeal and a companion lawsuit to a US Federal Trade Commission order should be resolved. This will happen because both occurrences will occur simultaneously.
These factors make Grail ownership problematic for Illumina. The company’s image and regulatory concerns add to this. The corporation insists on keeping Grail despite growing opposition. Carl Icahn, who owns 1.4% of Illumina, is fighting a proxy battle. Icahn owns 1.4% of Illumina. Illumina’s 1.4% shareholding provides Icahn control. Illumina’s aggressive effort to close the deal without antitrust approval worries Icahn. This scares Icahn most.
Illumina believes it can make Grail’s Galleri test more affordable, available, and profitable. Galleri, a novel test, can detect over 50 cancers from a single blood sample. Illumina still believes it can achieve this aim.