Francis D’Souza resigns as Illumina boss after proxy fight with Carl Icahn

Illumina Chief Executive Officer Francis D’Souza has resigned after a fierce proxy battle with activist investor Carl Icahn over the future of the world’s largest gene sequencing company.

Illumina said Sunday that the company’s board of directors has accepted D’Souza’s immediate resignation and has begun a search for a replacement. The company said D’Souza will remain an advisor to Illumina until July 31.

Illumina said Charles Dadswell, a senior vice president and general counsel of the company, has been named interim chief executive.

The resignation of D’Souza, who was appointed chief executive in 2016, follows the departure last month of Illumina Chair John Thompson, who was ousted in a shareholder vote following a proxy campaign by Icahn.

The 87-year-old activist investor led a shareholder campaign that focused on Illumina’s “reckless decision” to close its $8 billion acquisition of cancer test developer Grail in 2021 against the wishes of EU and US antitrust regulators.

Icahn, who holds a 1.4 percent stake in Illumina, said it was “inexplicable and inexcusable” that the Thompson-led board moved forward without ascertaining whether it would receive approval from EU regulators.

Icahn had called on Illumina’s board to fire D’Souza, saying he had masterminded a “Hail Mary” powergrab by acquiring Grail and allowing the core business to deteriorate. He also alleged that most of Illumina’s directors were handpicked by D’Souza – a claim the company denied.

D’Souza survived the leadership vote on 25 May, garnering 71 per cent support from shareholders. But the proxy fight weakened his position, and he began talks on his exit from the company last week, according to sources with knowledge of the talks.

Illumina said there is no severance pay associated with the resignations.

The Grail acquisition plunges Illumina into years of legal battles with antitrust regulators in Brussels and Washington at a time when its core business of gene sequencing is under pressure from new entrants.

In December, Brussels ordered Illumina to divest Grail and plans to issue fines of up to $453mn for “gun jumping”.

The US Federal Trade Commission has also ordered Illumina to divest Grail. Illumina is appealing the orders from EU and US regulators. Icahn also alleged that the board lacked independence and that most of the directors were handpicked by D’Souza.

Illumina’s market capitalization has plummeted from $75bn in August 2021, when it bought Grail to less than $32bn on Friday.

In a letter to Illumina employees posted on LinkedIn, D’Souza said his decision to leave was “extremely difficult” but that he felt “fulfillment and pride in where we’ve taken the company,” including the acquisition of Grail. Felt it.

“My belief in the potential of Grille’s potentially life-saving technology and the benefits of its merger with Illumina remains unshakable,” he wrote.

But many shareholders are skeptical about Illumina’s determination to remain on the grill and want the board to negotiate a deal with European Union authorities to separate the cancer diagnostics company.

The departure of D’Souza, who is also a Disney director, comes at an important time for Illumina, which recently launched a new generation of gene sequencing machines, called the NovaSeq X.

The company faces increasing competition from several new entrants and from Chinese gene sequencing company MGI.