February 21, 2024

Illumina CEO Francis deSouza on Q1 Earnings, Grail Acquisition

illumination Chief Executive Francis deSouza on Wednesday touted the company’s controversial acquisition of Grail after the cancer test developer doubled its revenue last year.

The Grail deal is the focus of a bitter proxy battle between Illumina and activist investor Carl Icahn. Antitrust regulators in the U.S. and Europe also ordered Illumina to divest $7.1 billion in acquisitions that Illumina will complete in 2021.

Grail hit $20 million in revenue in the three months ended April 2, according to Illumina’s first-quarter numbers earnings release. That’s up from $10 million in the same period a year ago.

DeSouza told CNBC’s “Squawk Box” that those sales were driven entirely by Grail early screening testwhich can detect more than 50 types of cancer from a single blood draw.

He noted that Grail delivered 20,000 tests in the first quarter alone.

“Customer demand has been very strong,” deSouza said, calling the test a “huge breakthrough” product.

He added that the Grail deal “makes sense” for Illumina because the company could significantly expand the testing market.

DeSouza noted that the company has operations in more than 150 countries. Illumina is also working to find a way to get patients reimbursed for the $950 test.

“We can speed up the speed at which this test is brought to more people … faster than Grail can do it on its own,” deSouza told CNBC.

But Icahn, who owns 1.4 percent of Illumina, called the Grail deal “catastrophic” and “a new low for corporate governance.”

Icahn did not immediately respond to a request for comment.

Last month, he launched a proxy fight over the Grail acquisition, seeking a seat on Illumina’s board and urging the company to call off the deal.

His resistance to the deal stemmed from Illumina’s decision to close the deal without approval from antitrust regulators.

Earlier this month, the U.S. Federal Trade Commission ordered Illumina to divest the acquisition, saying the deal would stifle competition and innovation.

The EU’s executive arm, the European Commission, blocked the deal last year over similar concerns.

Illumina is appealing both orders and expects to make a final decision in late 2023 or early 2024.Last week, the U.S. Court of Appeals explain It will expedite the review of Illumina’s appeal of the FTC order.