Illumina News: ILMN Stock Slides Lower on $8 Billion Grail Deal

Shares of Illumina (NASDAQ:ILMN) stock are taking a beating on Monday despite some major company news.

A close-up shot of a finger with a blood prick and a test strip.

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The DNA sequencing firm announced that it is acquiring Grail, a healthcare company focused on early detection of cancer, for stock and cash totaling $8 billion. More specifically, the full breakdown includes $3.5 billion in cash and $4.5 billion of ILMN stock.

Additionally, according to the release, Grail stockholders will be given future payments of “a tiered single digit percentage of certain GRAIL-related revenues.”

The main driver behind this deal is Grail’s multi-cancer screening test, which will help detect more cancers earlier and hopefully lead to better outcomes. Also, it allows Illumina to try and work toward mastering next-generation sequencing (NGS). This is key because NGS oncology testing has a total addressable market that could grow to $75 billion by 2021.

Francis deSouza, president and CEO of Illumina, had this to say about the deal:

“Over the last four years, GRAIL’s talented team has made exceptional progress in developing the technology and clinical data required to launch the GalleriTM multi-cancer screening test. Galleri is among the most promising new tools in the fight against cancer, and we are thrilled to welcome GRAIL back to Illumina to help transform cancer care using genomics and our NGS platform. Together, we have an important opportunity to introduce routine and broadly available blood-based screening that enables early cancer detection when treatment can be more effective and less costly.”

GRAIL was founded by Illumina in 2016, and is known for cancer detection through blood tests.

ILMN stock was down 9.1% as of Monday afternoon.

On the date of publication, Nick Clarkson did not have (either directly or indirectly) any positions in the securities mentioned in this article. 

Nick is a web editor at InvestorPlace.

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