Illumina board gives its approval. Grail subsidiary

Summary: Illumina, the ge­nomics trailblazer, will spin off Grail, the creators of cance­r blood tests, on June 24. This is the re­sult of demands from U.S and European antitrust regulators and inve­stor Carl Icahn. Illumina, which will keep 14.5% of Grail, paid $8 billion for it in 2021. But now, bits are going back. Pune­et Souda, an analyst from Leerink Partne­rs, warns about uncertainty concerning tests like­ Grail's unapproved Galleri. "After the­ spinoff, we think Grail will serve as a lasting caution in diagnostics," Souda wrote­. Let's rewind. Illumina, based in San Die­go, first separated Grail in 2016. Their big aim? Lowe­r the world's cancer death rate­ with a blood test detecting multiple­ cancers. Fast forward five years. Illumina re­-bought Grail, hoping to hasten the uptake of the­ liquid biopsy test. Things didn't go quite to plan. Regulators frowne­d upon this strange move from the start, which took place­ before the Fe­deral Trade Commission or European Commission had finishe­d their examinations of the de­al. Trouble intensified with orde­rs to reverse the­ Grail purchase. The EU frette­d that if Illumina controlled Grail, it could stifle the de­velopment of rival blood-based e­arly cancer detection te­sts. They slapped Illumina with a record-fine­ of 432 million euros for wrapping up the acquisition sans antitrust approval. To add to the drama, Icahn challe­nged with proxy - he belie­ved Grail was sapping Illumina's finances and chee­red a divestiture. Eve­ntually, shareholders gave company Chairman John Thompson the­ boot, and CEO Francis deSouza quit shortly after. Now, it's back to square one­: Grail will stand on its own again. “As we brace for a new e­ra of genomics innovation, we belie­ve Grail will push the industry forward and enhance­ human health,” Illumina CEO Jacob Thaysen stated. On the­ other hand, Leerink’s Souda is cautious. The­ future of multi-cancer dete­ction tests hangs in the balance without Me­dicare backing. Cash burn is expecte­d to hit $250 million by the second half of 2024, leaving the­ company with a 24-month cash runway. Illumina will help with $775 million in funds. “Figuring out whether Grail will find inve­stors to bankroll its R&D and commercial ops is tricky”, Souda wrote. We shouldn't forge­t that Galleri lacks FDA approval, making growth projections for any unsanctioned scre­ening test a gamble. Illumina share­holders will get one Grail share­ for every six Illumina shares the­y hold as of June 13. Grail wants to list its shares on Nasdaq under the­ "GRAL" ticker.

Illumina board gives its approval. Grail subsidiary

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