Illumina parts ways with Grail, with divestiture complete

Nearly four years after first pitching its multibillion-dollar plan to obtain Grail, Illumina has cut (nearly) all ties with the cancer blood test developer. 

The DNA sequencing giant has completed its spinoff of the company—closing the book on a saga spanning continents, courtrooms and Carl Icahn’s calls for changes in leadership. 

Starting tomorrow, Grail will begin trading the “regular way” under its own Nasdaq ticker, GRAL, as an independent public outfit. Illumina had outlined its plans for the divestment earlier this month, taking the time to distribute one share of Grail common stock for each holder’s six of Illumina, before the company made its full Nasdaq debut. 

Going forward, Illumina will—once again—maintain a 14.5% share of the company. The percentage matches the stake that it had held since Grail’s founding, when it first launched as an Illumina spinoff in 2015. 

Grail previously laid out its plans for a Nasdaq IPO in September 2020, after raising nearly $2 billion in venture capital funds to support the massive development program for its Galleri multi-cancer detection test. 

However, Illumina’s $8 billion reacquisition deal would be announced later that month—and, nearly a year after that, that deal would be closed over the objections of antitrust regulators in the U.S. and Europe. 

Fast forward to today, when, as of this writing and before official trading, Grail’s stock price of $18.63 would bestow a market cap of about $580 million—far below the billions that Illumina paid. 

During that time, Illumina incurred a record-setting fine from the European Commission for flaunting its competition and merger regulations, totaling 432 million euros. Illumina was also left on the hook to fund Grail’s business plans for the next two-and-a-half years—amounting to approximately $1 billion—in addition to the amounts the company paid to fund operations while managing from arms’ length.

Meanwhile, Illumina disclosed earlier this month that it had taken out a $750 million loan from J.P. Morgan Chase to help beef up Grail’s balance sheet, borrowed at about 6.70%.

“As we turn the page, we are excited to share our plan to accelerate topline growth, achieve operational excellence, deliver for our customers, and maximize value for shareholders in our upcoming strategy update,” Illumina CEO Jacob Thaysen said in the company’s divestiture announcement, which also scheduled its second-quarter earnings report for August 6 and a public business strategy update for August 13.

“Grail plays a critical role in the fight against cancer, and while the company is no longer part of Illumina, we remain confident in its future and will continue to support Grail with our sequencing technology, end-to-end workflows, and suite of services,” said Thaysen, who was named CEO following the departure of long-time Illumina chief Francis deSouza.

DeSouza resigned in June 2023 after activist investor Carl Icahn waged a proxy battle against Illumina’s leadership, lamenting how the company’s share price had declined more than 75% from its high point just before it announced the closing of the Grail deal in August 2021.