Investing.com -- Illumina (NASDAQ:ILMN) shares edged higher in premarket trading in New York on Monday, after the gene-sequencing device maker said it will offload cancer screening start-up Grail.
In a statement on Sunday, San Diego-based Illumina noted that divestiture will be executed through a "third-party sale or capital markets transaction" and is expected to be finalized by the end of the second quarter of next year.
"We are committed to an expeditious divestiture of [Grail] in a manner that allows its technology to continue benefitting patients," said Chief Executive Jacob Thaysen in the statement. "The management team and I continue to focus on our core business and supporting our customers. I am confident in Illumina's opportunities and our long-term success."
Illumina acquired Grail in 2021 in an agreement that valued the seller of a blood test designed for the early detection of cancer at $7.1 billion. However, the agreement has faced heavy scrutiny, particularly after it was completed without the formal approval of the European Commission. The divesiture of Grail would be "consistent" with an order from Brussels, Illumina noted.
The troubled deal has also faced pushback from the U.S. Federal Trade Commission, which flagged that Illumina could deny crucial inputs into cancer-detecting blood tests made by Grail's rivals.
On Friday, a federal appeals court found that while the FTC was right to issue the challenge, it must conduct a new review of the purchase. Illumina said it would not appeal the ruling.
Many investors in Illumina, including billionaire Carl Icahn, have also voiced their opposition to the Grail deal. Earlier this year, Icahn, arguing that the acquisition amounted to a breach of Illumina's fiduciary duties, helmed a proxy battle that led to the resignation of former boss Francis deSouza.
Illumina's share price has slumped by over 37% so far this year.