Source: Sina Finance
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Illumina (ILMN.US), a leader in the U.S. genetic testing field, announced on Monday its plan to spin off and independently list its cancer detection-focused subsidiary, GRAIL. GRAIL is expected to be listed on the Nasdaq (17219.2803, 31.38, 0.18%) Stock Exchange under the ticker symbol GRAL. Illumina will distribute 85.5% of GRAIL’s shares to its shareholders as a dividend while retaining 14.5% ownership.
Illumina's shareholders will receive corresponding shares of GRAIL based on their shareholding ratio, specifically one share of GRAIL common stock for every six shares of Illumina stock held. The record date for this distribution is set for the close of business on June 13, 2024. Prior to the distribution date on Monday, June 24, 2024, GRAIL’s shares are expected to trade on the market in "when-issued" trading under the ticker symbol GRAL WI.This trading method allows investors to buy and sell shares before they are officially distributed to shareholders. By June 25, 2024, the first day after the distribution date, GRAIL’s shares are expected to begin trading on the Nasdaq Stock Market in regular way trading. Regular way trading means that stock transactions will follow normal market rules and procedures, allowing investors to buy and sell GRAIL’s shares just like any other stock.It is reported that GRAIL's establishment can be traced back to 2015, when it started as a project within Illumina. In 2016, GRAIL was spun off as an independent entity. In September 2020, GRAIL had filed for an initial public offering (IPO) in the United States, but later that month, Illumina reacquired it in a cash-and-stock deal, valuing the company at approximately $8 billion at the time.However, the deal faced opposition from the European Commission and the U.S. Federal Trade Commission, as they were concerned that Illumina might prevent competitors of GRAIL from using its technology to develop competing blood-based early cancer detection products. As a result, Illumina was fined and ultimately forced to cancel the acquisition.Illumina's stock performance has not been ideal recently, with a decline of about 27% year-to-date and a drop of 52% over the past year.According to GRAIL's latest financial report, the company achieved $93 million in revenue in 2023, a year-over-year increase of 68%, but its operating loss reached $1.5 billion. Excluding the impact of goodwill impairment, the loss amounted to $797 million. In the first quarter of 2024, GRAIL’s revenue was $27 million, a year-over-year increase of 36%, while its operating loss was $227 million.This spin-off plan marks an important step for Illumina in adjusting its business structure after facing regulatory challenges and market pressures. By independently listing GRAIL, Illumina aims to create greater value for shareholders while providing GRAIL with more flexibility and resources to drive innovation and development in the field of cancer detection.
Editor-in-Chief | Zhao Qing Reviewed by | Yi He
