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Activist investor Carl Icahn on Thursday won enough support from Illumina shareholders to oust the biotech company’s board chair.
Shareholders booted Chairman John Thompson. An Illumina spokesperson said a latest chair will probably be chosen in the following few weeks.
Icahn had urged shareholders to vote off the corporate’s CEO, Francis deSouza, and Thompson from the nine-member board. DeSouza survived the proxy fight.
Shareholders also voted to put in one in every of Icahn’s three board nominees, Andrew Teno, a portfolio manager at Icahn Capital LP, an entity where Icahn manages investment funds.
The vote was announced after Illumina’s annual meeting, marking a decisive end to a two-month proxy fight between Icahn and the corporate over a controversial acquisition.
Illumina, in a press release, thanked Thompson for his service over time, saying his executive and business experience was deeply valued.
Earlier this month, proxy advisory firm Institutional Shareholder Services beneficial that Illumina shareholders back Teno.
Icahn, who owns a 1.4% stake in San Diego-based Illumina, had proposed two other director candidates who’re his current or former employees.
The vote is a blow to Illumina, which has claimed Icahn’s three nominees lack “relevant skills and experience” and would “threaten the progress” of the biotech company’s core DNA sequencing business.
Battle over Grail acquisition
Icahn has accused Illumina’s executive management and board of poor oversight, particularly with regard to the corporate’s $7.1 billion acquisition of cancer test maker Grail in 2021.
He has called on the corporate to unwind the “absurd and questionable” deal and oust deSouza “immediately.”
Icahn has slammed the manager for receiving a large pay bump despite a steep drop in the corporate’s market value.
Illumina’s market cap has plunged to roughly $33 billion from about $75 billion in August 2021, the month it closed the Grail acquisition.
Much of Icahn’s resistance to the deal stems from Illumina’s decision to shut it without approval from antitrust regulators within the U.S. and Europe.
The Federal Trade Commission in April ordered Illumina to divest itself of the acquisition over concerns that it could stifle competition and innovation.
The FTC’s decision reverses an administrative judge’s September ruling, which dismissed the agency’s initial challenge to the deal.
The European Commission, the manager body of the European Union, also blocked the deal last yr over similar concerns.
Illumina is appealing each orders and expects final decisions in late 2023 or early 2024.
The corporate has repeatedly defended its acquisition of Grail.
DeSouza told CNBC last month that the deal “is smart” because Illumina can significantly expand the marketplace for Grail’s early screening test, which might detect greater than 50 forms of cancers through a single blood draw.
The CEO also touted Grail’s 100% revenue growth throughout the first quarter compared with the identical period a yr ago.
In 2022, Grail generated around $55 million in revenue. Illumina expects it to make as much as $110 million this yr.
Icahn encountered his own criticism throughout the proxy battle.
Notable short seller Hindenburg Research accused Icahn Enterprises of being overvalued and likened it to “Ponzi-like economic structures.”
Icahn Enterprises has called those claims “misleading and self-serving.”
— CNBC’s Spencer Kimball contributed to this report.