The approximately four-year acquisition/anti-acquisition battle came to an end recently. In September 2020, Illumina, Inc. forcibly acquired GRAIL, a former subsidiary that had been spun off, disregarding investigations by the U.S. Federal Trade Commission and competition regulatory authorities in the European Union.And now, under the重重pressure from regulatory agencies, capital, and business setbacks, Illumina has ultimately chosen June as the month for GRAIL to be spun off as an independent entity and go public again.Illumina stated in a press release that the shares of the newly independent Grail are expected to be distributed on June 24. Illumina will retain 14.5% of the company's shares, with the stock code $GRAL. Grail’s shares will begin full trading on NASDAQ on June 25.Origin——Suspected Insider Trading InvolvedGrail was originally a division of sequencing giant Illumina. In 2015, Grail was spun off from Illumina to become a multi-cancer early detection company. At that time, it raised approximately $2 billion to develop its Galleri multi-cancer early detection test. Galleri is able to identify cancer types by recognizing DNA methylation patterns. This technology can detect more than 50 types of cancer with a single blood draw. Although it seems to have demonstrated some effectiveness in large-scale clinical trials, it has not yet been launched on the market.It also needs to keep spending money due to a series of large-scale clinical trials, and the money being spent is still Illumina's.In an article published in April 2023, signed by Mike and ZG, it was pointed out that during several rounds of GRAIL's financing in 2016 and 2017, there were suspected insider transactions involving executives from Illumina, which made it necessary for Illumina to do everything possible to buy GRAIL back.This accusation has considerable reasonableness. After GRAIL was spun off and became a private company, it lacked corresponding financial statements. In fact, even after its acquisition, it remained in such a "black box" state. All that could be seen was its continuous clinical trials as a cancer early screening company and its constant burning of cash, which inevitably led to suspicions about how much trickery might be hidden within this black box.The Action of The Wolf of Wall StreetIcahn noted that Illumina is forced to pay for GRAIL's ongoing operations without the ability to integrate GRAIL into Illumina's operations, thus unable to realize any synergies or cost savings from the acquisition.Icahn's accusations are partially correct, as some people have indeed started to worry about the future of Galleri. So far, Galleri has not proven that early screening can actually reduce all-cause cancer mortality, and its false positive rate is quite high. In addition, some regulatory agencies are also being cautious and have not immediately placed orders for Galleri.Especially recently, on May 29, the UK's NHS (National Health Service) stated that they would not expedite the approval of Galleri. The established process requires the completion of a three-year clinical trial before it can be marketed, meaning it is not likely to be available until 2026.This could be the last straw that breaks the camel's back.GRAIL cannot prove to Illumina and its shareholders that it will be profitable in the short term and able to give back to Illumina; instead, it seems more like a parasitic leech sucking on Illumina.Which Data is Valid? NHS Punctures the Fantasy of Galleri's UK Launch Within the Yearhttps://www.statnews.com/2024/06/03/illumina-grail-spinoff-divestment/
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