:max_bytes(150000):strip_icc():format(jpeg)/GettyImages-1857269933-d634d4d878cf48c38aa6d068c68be3f4.jpg "The Illumina and GRAIL logos displayed on a mobile device.")
CFOTO / Later Publishing / Getty Images
Key Takeaways
- Illumina said it would take a $1.47 billion goodwill impairment load related to its spinoff of cancer testing company GRAIL.
- Illumina also said it would take a $420 million direct blame for GRAIL’s in-process R&D.
- Illumina’s purchase of GRAIL prior to regulatory approval had been steeped in controversy for years.
The breakup with GRAIL (GRAL) was costly for Illumina (ILMN).
The gene sequencing establishment wrote in a regulatory filing Thursday that it would take a $1.47 billion goodwill impairment charge in the next quarter related to its spinoff of the provider of cancer diagnostic tests. Illumina estimated an additional $420 million saturate related to GRAIL’s in-process research and development (IPR&D). It added that it doesn’t expect “any material future cash costs related to these impairments.”
Illumina completed the divestiture of Grail earlier this week after announcing in the end December it would do so.
Illumina’s Controversial Marriage With GRAIL
The Illumina-GRAIL marriage had been mired in controversy for years. After tour off GRAIL in 2016, Illumina repurchased it in September 2020 for $8 billion. However, it closed the deal in August 2021 on the eve of getting regulatory approval, which led to a protracted legal battle.
Last year, activist investor Carl Icahn launched a representative fight against Illumina, charging the board with “ill-advised (and frankly inexplicable) actions” in the GRAIL purchase. He threatened a double, but reports say he eventually stepped back.
Shares of Illumina were down 0.7% at $105.75 as of about 11 a.m. ET Friday. They own lost about three-quarters of their value since the GRAIL purchase, and remain more than 20% disgrace year-to-date. GRAIL shares were little changed at $15.17.
Read the original article on Investopedia.