Judge orders Icahn to strike confidential information from Illumina lawsuit
Judge orders Icahn to strike confidential information from Illumina lawsuit
Published: Jan 17, 2024
By Tristan Manalac
BioSpace
Delaware Chancery Court Judge Paul Fioravanti on Tuesday ordered three companies controlled by activist investor Carl Icahn to remove confidential information in their lawsuit against DNA sequencing giant Illumina related to its failed $8 billion purchase of Grail.
In the 33-page court decision, Fioravanti ruled that Andrew Temo, a portfolio manager at Icahn Enterprises who had been elected to Illumina’s board of directors in May 2023 after a proxy fight, should not have provided confidential, board-level information to Icahn—despite having access to such privileged information.
“After being seated on the Board, Teno received privileged and confidential Company information,” according to the court document. “Teno subsequently provided privileged and confidential information to Icahn and his affiliates,” which they then used in to craft their lawsuit.
“It is undisputed that the complaint contains information from Illumina that is protected by the attorney-client privilege,” the judge stated. “The fact that the public is not able to access that information does not remedy Teno’s unauthorized dissemination of Illumina’s privileged and confidential information or Plaintiffs’ unauthorized use of it.”
At the root of the legal dispute is Illumina’s failed buyout of Grail. First announced in September 2020, the acquisition agreement for the cancer testing biotech was valued at $8 billion—but it quickly spawned anti-trust problems for both companies.
The FTC in August 2023 filed a complaint seeking to block the merger, saying that it would threaten competition and stifle innovation in the space. The European Union also launched a lengthy investigation into the matter and ultimately decided that the acquisition violated its anti-trust regulations and, in December 2023, ordered Illumina to divest GRAIL.
Amid all the regulatory scrutiny, Icahn in April 2023 tried to undermine Illumina’s leadership and moved to place three of his representatives on the company’s board of directors. In seeking votes, Icahn alleged that Illumina failed “to take actions to maximize value for the company’s stockholders.”
In June 2023, Illumina CEO Francis deSouza stepped down from his post. However, in October 2023, Icahn filed a lawsuit against Illumina’s board of directors, alleging that they were remiss in their fiduciary obligations to the company’s shareholders, seeking $476 million in damages.
“I have done so today in light of, among other things, the board’s unconscionable and egregious actions relating to closing the acquisition of Grail without regulatory approval, thus putting Illumina, a great company, in harm’s way,” Icahn said of the lawsuit at the time, according to Reuters.
Last month, Icahn said in a letter to shareholders that he intends to give the boot to Illumina’s board of “legacy conflicted directors.”
Source: BioSpace
