Illumina CEO’s Surprise Exit Shakes Up Gene Sequencing World
Francis deSouza, the chief executive of Illumina, has resigned from his position following a contentious proxy battle with activist investor Carl Icahn. This development has significant implications for Illumina, the world’s largest gene sequencing company.
Illumina announced on Sunday that the board of directors has accepted deSouza’s immediate resignation and has initiated the search for a new CEO. Until a suitable successor is identified, Charles Dadswell, an experienced senior executive serving as the company’s senior vice-president and general counsel, will assume the role of interim chief executive.
Departure of Illumina Chair The resignation of deSouza comes shortly after the departure of Illumina’s chair, John Thompson. Thompson was ousted in a shareholder vote triggered by Carl Icahn’s proxy campaign, which primarily focused on Illumina’s acquisition of Grail, a cancer test developer.
Carl Icahn, an activist investor with a 1.4% stake in Illumina, led a shareholder campaign criticizing the board’s decision to acquire Grail without obtaining clearance from EU and US antitrust regulators. Icahn called for deSouza’s removal, alleging that the acquisition was a “Hail Mary” power grab and that Illumina’s core business suffered as a result. The company denied Icahn’s claim that
most of its directors were handpicked by deSouza.Although deSouza received 71% support from shareholders in the leadership vote on May 25, the proxy battle weakened his position. Subsequently, he entered negotiations with the company for his exit.
The acquisition of Grail has plunged Illumina into lengthy legal battles with antitrust regulators in Brussels and Washington. Both authorities have ordered Illumina to divest Grail, and fines are expected to be issued. The acquisition has also contributed to a significant decline in Illumina’s market capitalization.
In a letter to Illumina employees posted on LinkedIn, deSouza expressed the difficulty of his decision to leave. He passionately voiced his conviction regarding the life-saving capabilities of Grail’s revolutionary technology and the multitude of advantages that would arise from its integration with Illumina. DeSouza is also a director of Disney.
Illumina faces growing competition from new entrants and Chinese gene sequencing company MGI. This comes at a critical time for the company, which recently launched the NovaSeq X, a new generation of gene sequencing machines.
Carl Icahn described the leadership changes at Illumina as important steps, not just for the company but also for activism in general. Analysts expect a favourable reaction in the stock market, given the increased certainty of Grail’s divestment and the potential for improved execution under new leadership.
The resignation of Francis deSouza as Illumina CEO marks a significant development in the aftermath of a proxy battle with Carl Icahn. The acquisition of Grail, legal battles with antitrust regulators, and the challenges posed by competition have placed Illumina at a critical juncture. The company’s search for a new CEO presents an opportunity for revitalization and a renewed focus on its core business.
