Small molecules can lead to big legal trouble. Illumina has filed a lawsuit against the blood test developer Guardant Health and its founders—once former employees of the DNA sequencing giant—claiming they launched their company and secured cancer screening patents after absconding with confidential information.
In its complaint, Illumina said Guardant’s co-CEOs Helmy Eltoukhy and AmirAli Talasaz set up Guardant in 2011 while still serving on its payroll. Illumina also accused Eltoukhy specifically of drafting patent applications on Illumina’s computers before leaving the company with tens of thousands of forwarded emails and internal documents.
The litigation places Illumina in the tricky position of suing not only one of its own customers but a main competitor in the burgeoning liquid biopsy space following its acquisition of Grail—a multi-billion-dollar deal that Illumina forced through last year despite ongoing scrutiny from international regulatory watchdogs, which have said it may give Illumina the impetus to throttle the development of rival diagnostics that rely on the company’s DNA sequencers.
Guardant claimed as much in its public response, calling the lawsuit “frivolous and retaliatory” and designed to suppress competition.
“We believe Illumina is using the courts to retaliate against us for registering concerns about the antitrust implications of Illumina’s acquisition of Grail—another provider of blood-based cancer tests—and in an attempt to slow us down in the marketplace as we get ready to launch our blood test to screen for early signs of colorectal cancer,” Guardant’s general counsel, John Saia, said in a statement.
However, both Guardant and Illumina have separately stated that the lawsuit will not affect the companies’ current business relationship or threaten their long-term supply agreements.
Illumina had previously launched Grail after developing it as a spinout business in 2016. Talasaz and Eltoukhy, meanwhile, departed the company in 2012 and 2013, respectively.
Illumina’s lawsuit, filed in federal district court in Delaware, centers on as many as 35 different Guardant patents including patents for methods to detect tumor mutations among pieces of cell-free DNA found floating in the bloodstream. The company claims that their ownership—as well as any ensuing profits collected by the cancer test developer over the past decade—should be transferred over to Illumina.
The company said it became aware of the copied documents following Guardant’s previous lawsuits against Foundation Medicine—including the final case over digital technology patents, which reached a $25 million settlement in early January.
Meanwhile, Eltoukhy’s position at Guardant made him the highest-paid medtech CEO in 2020, when his compensation multiplied by more than 120 times to over $113 million thanks to the company’s stock awards. Talasaz garnered a similar nine-figure pay as a founder, though at that time he was serving as president and chief operating officer, before being named co-CEO in August 2021.
Guardant itself collected $374 million in revenue during 2021, driven by 87,600 clinical tests and 18,600 biopharmaceutical tests ordered over the course of the year—representing a 30% gain in sales over its 2020 haul of $287 million. According to Eltoukhy, the use of its Guardant360 CDx cancer blood test last year grew twice as fast within the community screening setting, compared to orders from academic centers.