Illumina Inc (NASDAQ:ILMN), which has faced a bruising battle with activist investor Carl Icahn, said CEO Francis deSouza resigned as CEO with immediate effect on Sunday.
The gene sequencing company named senior vice president and general counsel Charles Dadswell interim CEO while it searches for a new CEO, adding that deSouza will stay on in an advisory capacity until July 31, 2023.
"Illumina's technology remains at the forefront of DNA sequencing and has continued to set the pace for the industry,” Illumina chair Stephen MacMillan said in a statement.
“We are confident Illumina can continue to execute on its goals while we conduct and complete a CEO search process.”
In an open letter to shareholders in March, Icahn blamed Illumina’s acquisition of cancer diagnostics company Grail Inc for wiping $50 billion of value from its market capitalization.
Illumina spun off Grail in 2016, retaining a 12% stake, before reacquiring the company in 2021. The acquisition was opposed by US and European regulators.
Icahn said: “Illumina’s share price performance, and the $50 billion of value destruction that has occurred since the Grail deal was closed, clearly shows that shareholders have lost faith in Illumina’s management team and board of directors, yet these individuals suffer no consequences or remorse. The members of Illumina’s management team and board of directors collectively own less than 0.1% of the company’s stock yet they feel entitled to take these reckless actions with our money.”
In April, the Federal Trade Commission (FTC) issued an Opinion and Order requiring Illumina to divest Gral Inc.
The FTC said the deal would stifle competition and innovation in the US market for life-saving cancer tests. The Opinion reversed an Administrative Law Judge’s initial decision that dismissed the antitrust charges in a complaint brought by FTC staff.
Earlier this month, Reuters reported that Illumina filed an appeal against the FTC order arguing that the FTC "violated due process by depriving Illumina and Grail of a fair proceeding before an impartial tribunal", according to the filing in the US Fifth Circuit Court of Appeals.
"It has been the privilege of a lifetime to serve Illumina. When I joined this company in 2013, we talked about making the company more clinical, more digital, and more global. On behalf of patients, clinicians and physicians everywhere, I'd like to thank the thousands of Illumina employees who made it happen,” deSouza said in Sunday’s announcement.
“We have made great progress together, but I believe we are still at the very beginning of the impact Illumina will have on human health by unlocking the power of the genome."
The company’s shares rose 2.1% to $204.73 in pre-market trading.
Contact the author at stephen.gunnion@proactiveinvestors.com