Francis deSouza resigns as Illumina boss after proxy battle with Carl Icahn

Illumina chief executive Francis deSouza has resigned following a bruising proxy battle with activist investor Carl Icahn over the future of the world’s biggest gene sequencing company.

Illumina said on Sunday that the company’s board of directors had accepted deSouza’s immediate resignation and begun a search for a replacement. DeSouza will stay on in an advisory capacity at Illumina until July 31, said the company.

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

The resignation of deSouza, 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 $8bn acquisition of cancer test developer Grail in 2021 against the wishes of EU and US antitrust regulators.

Icahn, who has a 1.4 per cent stake in Illumina, said it was “inexplicable and unforgivable” that the board led by Thompson went ahead with the deal without ascertaining whether it would get clearance from EU regulators.

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

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

In December, Brussels ordered Illumina to divest Grail and is planning to issue a fine worth up to $453mn for “gun jumping”.

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

Illumina’s market capitalisation has plunged from $75bn in August 2021, when it bought Grail, to less than $32bn as of Friday.

The departure of deSouza, who is also a director of Disney, comes at a critical time for Illumina, which recently launched a new generation of gene sequencing machines, called NovaSeq X.