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Activist investor Carl Icahn on Thursday garnered enough support from Illumina shareholders to remove the chairman of the board of a biotechnology company.
Shareholders fired CEO John Thompson. An Illumina spokesman said a recent chair can be chosen in the following few weeks.
Icahn urged shareholders to vote for the corporate’s CEO Francis deSouza and Thompson on the nine-member board. DeSouza survived the proxy fight.
Shareholders also voted to appoint considered one of three candidates to Icahn’s board, Andrew Teno, a portfolio manager at Icahn Capital LP, the entity where Icahn manages mutual funds.
The vote was announced after Illumina’s annual meeting, marking a decisive end to a two-month battle between Icahn and the corporate over the controversial acquisition.
In a press release, Illumina thanked Thompson for his a few years of service, saying his executive and business experience was deeply appreciated.
Earlier this month, proxy advisory firm Institutional Shareholder Services really helpful that Illumina shareholders support Teno.
Icahn, who owns a 1.4% stake in San Diego-based Illumina, has proposed two other director candidates who’re either his current or former employees.
The vote is a blow to Illumina, which says Icahn’s three candidates wouldn’t have “the best skills and experience” and would “threaten the progress” of the biotech firm’s core DNA sequencing business.
Battle for the Grail
Icahn accused Illumina’s executive leadership and board of directors of poor oversight, particularly regarding the corporate Acquisition for $7.1 billion makers of the grail cancer test in 2021.
He called on the corporate to terminate the “absurd and dubious” contract and “immediately remove” deSouza.
Icahn sharply criticized the chief for receiving an enormous salary increase despite a pointy decline in the corporate’s market value.
Illumina’s market capitalization fell to around $33 billion from around $75 billion in August 2021, the month the Grail acquisition closed.
Much of Icahn’s resistance to the deal stems from Illumina’s decision to shut it down without approval from US and European antitrust authorities.
The Federal Trade Commission ordered Illumina to withdraw from the acquisition in April amid concerns it will stifle competition and innovation.
The FTC’s decision overrules the executive judge’s decision September a ruling that dismissed the agency’s initial challenge to the deal.
The European Commission, the European Union’s executive arm, also blocked the deal last 12 months over similar concerns.
Illumina is appealing each orders and expects final decisions in late 2023 or early 2024.
The corporate has repeatedly defended the acquisition of Grail.
DeSouza told CNBC last month that the deal “is smart” as Illumina could greatly expand the Grail market early screeningwhich may detect greater than 50 sorts of cancer with a single blood draw.
The CEO also touted Grail’s 100% revenue growth in the primary quarter in comparison with the identical period a 12 months ago.
In 2022, Grail generated roughly $55 million in revenue. Illumina expects to earn as much as $110 million this 12 months.
Icahn faced his own criticism throughout the proxy battle.
Notable short seller Hindenburg Research accused Icahn Enterprises of being overvalued and compared it to “pyramid-like economic structures”.
Icahn Enterprises called the claims “misleading and calculated.”
— Spencer Kimball of CNBC contributed to this report.