Illumina Appoints New CEO After Wild Ride With Proxy Battle
Key takeaways
- DNA company Illumina has appointed a new CEO, Jacob Thaysen
- The move comes after a bitter proxy battle launched by investor Carl Icahn
- Illumina’s share price dropped as much as 4% at the announcement
Healthcare company Illumina has seen the light at the end of the tunnel with a new CEO appointed months after one of the company’s investors launched a vicious Succession-style proxy battle.
Everyone is on board with the new CEO, which is a relief to the company and Wall Street. Investors will now be watching to see if Illumina can regain its tumbled share price or if the new top dog will be another bust. Here’s what we know so far.
What’s happening with Illumina?
Biotech company Illumina has ended the search for a new CEO and appointed Jacob Thaysen to the top role. Thaysen joins the company after a decade at medical devices company Agilent Technologies and steps into the role on September 25. Interim CEO Charles Dadswell will return to his position as senior vice president and general counsel.
The new CEO has the blessing of activist investor and billionaire Carl Icahn, who was at the center of a proxy battle with Illumina’s board. “I think he will do an excellent job, and he has my full support,” Icahn posted on X.
Why did Icahn launch a proxy battle? Illumina tried to close a $7.1 billion acquisition of cancer test developer Grail in 2021. The issue? They hadn’t gotten approval from antitrust regulators in the U.S. and the EU.
From an investor’s perspective, the company is taking a substantial financial risk. Icahn criticized Illumina’s former CEO, Francis deSouza, who eventually resigned from the position after the proxy battle in May — despite having enough votes to keep him in the job. The battle also resulted in Icahn winning enough shareholder support to fire the board’s chair and appoint his own nominee to the board.
Illumina’s share price woes
After Illumina’s Grail deal went ahead despite protests from two regulators, the share price plummeted and is currently around 70% down since August 2021. As a result, Illumina’s market value has cratered from $75 billion to just $25 billion.
Illumina hasn’t been immune to the macroeconomic landscape either, laying off hundreds of employees in a bid to save on costs. The healthcare company’s latest earnings beat reflected a slowdown in customer spending, with Illumina slashing its annual revenue growth forecast to 1%, far lower than the previously forecasted 7% to 10%.
Some investors are concerned that Thaysen’s position as a first-time CEO may not be what the company needs right now, which was reflected in the stock price’s reaction to the news. Illumina shares declined as much as 4% at the market opening on Thursday, while Agilent’s stock dropped 2.3%.
The bottom line
It seems Wall Street doesn’t have much faith that Illumina can turn things around, even with a new CEO with healthcare experience.
But if Thaysen can get the company back on track, it could be an excellent long-term opportunity for investors to get in at the ground level before the share price returns to its former glory.
