Oct 13, 2023
SAN DIEGO, Oct. 13, 2023 /PRNewswire/ -- Illumina, Inc. (NASDAQ:ILMN), has received an order from the European Commission (EC) directing the company to divest GRAIL.
Receipt of the order is an important next step in evaluating divestiture options for GRAIL. Illumina is committed to resolving all issues regarding GRAIL in a timely manner, with the objective of achieving the maximum value for shareholders and the best outcome for GRAIL. Notably, the terms of the order provide for flexibility in transaction structure, an encouraging outcome from Illumina's ongoing dialogue with the EC.
Under the terms of the EC's order, Illumina will have twelve months to divest GRAIL, with the potential for a three-month extension, and will be permitted to explore a range of structures including, but not limited to, a third-party sale or a capital markets transaction. Illumina will lead the divestiture process and, with the assistance of financial and legal advisors, has already begun the preparatory work necessary for divestment, if needed.
Consistent with the previous interim measures orders, Illumina is required to continue funding GRAIL until any divestiture. In the instance of a capital markets transaction, Illumina must capitalize GRAIL at the time of the transaction with two-and-a-half years of funding based on GRAIL's long-range plan. The order also provides for Illumina to retain a stake in GRAIL of up to 14.5% and reestablish the royalty arrangement it previously had in place with GRAIL.
Illumina maintains that the Commission does not have jurisdiction over this acquisition. The company's jurisdictional challenge remains pending at the European Court of Justice (ECJ).
If Illumina wins its jurisdictional challenge at the ECJ, the basis for the EC's divestiture order would be eliminated. However, if Illumina is not successful with either its ECJ jurisdictional appeal or in a final decision of the U.S. Fifth Circuit Court of Appeals, the company will divest GRAIL.
Illumina's third quarter 2023 earnings call is scheduled for November 9, and company leaders will respond to further questions from the investment community at that time.
Cautionary Note on Forward-Looking Statements
This release may contain forward-looking statements that involve risks and uncertainties. Among the important factors to which our business is subject that could cause actual results to differ materially from those in any forward-looking statements are: (i) our ability to agree on a divestment plan with the European Commission pursuant to the divestiture order it has issued; (ii) our ability to timely execute a strategic alternative that maximizes the value of GRAIL to our stockholders given the parameters required by the divestiture order; (iii) the risk that ongoing legal proceedings challenging the decisions of the European Commission and the U.S Federal Trade Commission do not result in favorable outcomes for us; (iv) the risk that distractions associated with the potential divestment of GRAIL and associated legal proceedings or regulatory obligations will harm our business, including current plans and operations, together with other factors detailed in our filings with the Securities and Exchange Commission, including our most recent filings on Forms 10-K and 10-Q, or in information disclosed in public conference calls, the date and time of which are released beforehand. We undertake no obligation, and do not intend, to update these forward-looking statements, to review or confirm analysts' expectations, or to provide interim reports or updates on the progress of the current quarter.
Cautionary Note on Statements of Opinion
In addition to forward-looking statements, this release contains statements of opinion with which all may not agree.
Illumina is improving human health by unlocking the power of the genome. Our focus on innovation has established us as a global leader in DNA sequencing and array-based technologies, serving customers in the research, clinical, and applied markets. Our products are used for applications in the life sciences, oncology, reproductive health, agriculture, and other emerging segments. To learn more, visit illumina.com and connect with us on Twitter, Facebook, LinkedIn, Instagram, TikTok and YouTube.
SOURCE Illumina, Inc.