Following board fight, Francis deSouza resigns as Illumina CEO Leave a comment
Just two weeks after surviving an activist investor’s attempt to oust him from Illumina’s board, company CEO Francis deSouza has resigned his roles at the sequencing behemoth, Illumina said Sunday.
DeSouza stepped down effectively immediately from the CEO position and from the company’s board. He will remain an adviser through next month. Charles Dadswell, the company’s general counsel, will take on an interim CEO role as the board searches for the company’s next leader.
The news represents a reversal of Illumina’s recent public communications about deSouza, which had emphasized the support he had among the company’s investors. Last week, Illumina appealed the U.S. Federal Trade Commission’s order to divest Grail, a cancer diagnostics firm Illumina acquired for $8 billion without clearances from U.S. and European regulators.
“We thank Francis for his contributions and leadership, and are very excited about embarking on the next chapter of Illumina’s great journey,” Stephen MacMillan, the board chair, said in a statement. “Illumina’s technology remains at the forefront of DNA sequencing and has continued to set the pace for the industry. We are confident Illumina can continue to execute on its goals while we conduct and complete a CEO search process.”
DeSouza’s resignation was first reported by Endpoints. DeSouza had run Illumina since 2016.
“It has been the privilege of a lifetime to serve Illumina,” deSouza said in a statement. He added: “On behalf of patients, clinicians, and physicians everywhere, I’d like to thank the thousands of Illumina employees who made it happen. We have made great progress together, but I believe we are still at the very beginning of the impact Illumina will have on human health by unlocking the power of the genome.”
It was only on May 25 when Illumina in part blunted an effort by activist investor Carl Icahn to oust multiple directors, including deSouza. Shareholders voted to add only one candidate put forward by Icahn, Andrew Teno, who replaced John Thompson, who had been chairman.
In addition to wanting to add allies to the board, Icahn had crafted a scenario in which Illumina’s longtime CEO, Jay Flatley, would return to run the company and its current management team, including deSouza, would be pushed out. It was not clear if Flatley had actually agreed to take the job.
In a statement on Twitter, Icahn welcomed news of deSouza’s resignation.
“While obviously I believe the change of CEO should have come meaningfully sooner, it is still a very positive occurrence,” he said. He said that he saw deSouza’s departure as part of a series of positive developments for Illumina, including the board changes.
The crux of Icahn’s argument had been that deSouza and the Illumina board had been reckless in closing the Grail deal when both the FTC and European regulators had not cleared it and might oppose it on antitrust grounds. That has led to a protracted legal battle during which Illumina owns Grail, but cannot actively manage the company or make use of its valuable data.
It’s possible that European regulators could force Illumina to divest Grail — originally a spinout of Illumina — likely at a much lower valuation. In April, the Federal Trade Commission told Illumina to divest Grail.
Although deSouza survived the vote, Illumina’s chairman, John Thompson, did not. Illumina has since added two new directors to the board.
The fight was seen as a referendum on the direction of Illumina, and the vote amounted to a partial rebuke of the Grail strategy.
Illumina’s core business has been genome sequencing technology, and deSouza and company executives argued that acquiring Grail would help them enter the biggest potential market for DNA sequencing. DeSouza’s critics contended that moving to purchase Grail without regulatory approval amounted to an error that diverted the company from focusing on its sequencing technology.
In a letter to Illumina employees that he also posted online Sunday, deSouza said he had told the board he planned to resign last week. The letter includes deSouza’s reflections on his time at Illumina, the company’s growth, and the progress made in making DNA sequencing more affordable and accessible. Notably, it also includes a defense of the attempted Grail acquisition.
“Grail brings clinical genomics to mainstream consumers with its revolutionary cancer screening blood test,” he wrote. “My belief in the potential of Grail’s revolutionary technology and the benefits of merging it with Illumina remains unshakeable. It takes bold moves and courage to ‘improve human health by unlocking the power of the genome.’ That is Illumina’s mission, and it is in our DNA.”
