Rafael Henrique | Light Rocket | Getty Images
Enlightenment on Thursday urged shareholders to reject Carl Icahn’s three board nominees at this year’s annual meeting because they would “endanger” the progress of the biotech’s core business.
“Carl Icahn’s ownership of Illumina puts the company’s long-term success at risk, and its nominee directors do not bring relevant skills to the board,” San Diego-based Illumina said in a preliminary proxy statement filed Thursday.
The DNA sequencing company urged shareholders to discard and not vote on a proxy card sent by the activist investor or its affiliates. Illumina also urged shareholders to vote for the proposed board of directors and noted that final proxy statement material will be mailed soon. The company has not announced the date of its annual general meeting.
Illumina said it will provide more information on “the strength of our board and management team, our strategy for creating shareholder value — with innovation at its core — and the potential for Mr. Icahn’s nominees to damage that strategy.”
Icahn did not immediately respond to a request for comment.
Carl Icahn speaks at Delivering Alpha in New York on September 13, 2016.
David A Grogan | CNBC
Illumina’s comments are the latest step in a looming proxy fight with Icahn, which owns a 1.4% stake in the company. Icahn is urging Illumina to reverse its $7.1 billion acquisition of cancer test developer Grail, which he previously described as “a new low in corporate governance.” On Wednesday, he said Illumina should immediately bring back its former CEO, Jay Flatley, to “fix the situation.”
Illumina said Thursday Icahn is not a long-term shareholder and did not delve into the company before requesting representation on the board. The company noted that it acted “swiftly and deliberately” to meet with Icahn, interview its nominees in good faith and explore possible alternatives to a proxy fight.
But Icahn is “unwilling to compromise” and insisted the board add its three nominees without input from shareholders, Illumina said. The company also claimed Icahn said he wanted his nominees on the board because he controlled them and they were not independent.
“My guys report to me,” Icahn said of his nominees, according to Illumina.
The company said Icahn’s decisions had no relevant healthcare or genomics expertise on paper. After interviewing the nominees, Illumina found that they also lacked any “original perspective or detail” about how they would like to see the company differently.
“Each candidate instead recited the same poorly researched and unworkable ideas regarding GRAIL,” Illumina said.
The company added, “It has become abundantly clear that neither Mr. Icahn nor his three associate nominees – Jesse Lynn, Andrew Teno or Vincent Intrieri – understand the Illumina or GRAIL business and the regulatory processes involved.”
Intrieri, Founder and CEO of VDA Capital Management, was previously employed at Icahn. Lynn is general counsel of Icahn Enterprises and Teno is a portfolio manager at Icahn Capital LP, a firm where Icahn manages mutual funds.
Illumina shares were relatively flat following its announcement. The company’s market cap has shrunk to around $35 billion from about $75 billion in August 2021, the month it struck the Grail deal.
Icahn has previously claimed that the acquisition wiped out tens of billions of dollars in Illumina’s market value and “clearly demonstrates that shareholders have lost confidence in Illumina’s management team and board.”