Louisiana Sheriffs’ Pension & Relief Fund v. Illumina, Inc.

Court: United States District Court for the Southern District of California
Case Number: 23-cv-02328
Class Period: 09/21/2020 - 11/09/2023
Case Leaders: Hannah Ross, Avi Josefson, Scott R. Foglietta, John Rizio-Hamilton, Michael D. Blatchley
Case Team: Alec Coquin, Emily A. Tu

On December 21, 2023, Bernstein Litowitz Berger & Grossmann LLP (“BLB&G”) filed a class action lawsuit for violations of the federal securities laws in the U.S. District Court for the Southern District of California against Illumina, Inc. (“Illumina” or the “Company”) and certain of the Company’s current and former senior executives (collectively, “Defendants”) on behalf of investors who purchased or otherwise acquired Illumina common stock between September 21, 2020 and November 9, 2023, inclusive (the “Class Period”). This case is related to a previously filed securities class action pending against Illumina captioned Kangas v. Illumina, Inc., No. 3:23-cv-02082 (S.D. Cal.), which asserts a shorter class period of May 1, 2023 through October 16, 2023.

BLB&G filed this action on behalf of its client, Louisiana Sheriffs’ Pension & Relief Fund, and the case is captioned Louisiana Sheriffs’ Pension & Relief Fund v. Illumina, Inc. The complaint is based on an extensive investigation and a careful evaluation of the merits of this case. To view the complaint, see the Case Documents section of this page.

Illumina’s Alleged Fraud

Illumina develops, manufactures, and markets integrated systems for large scale analysis of genetic variation and biological functions. Prior to the Class Period, Illumina created a subsidiary called GRAIL. GRAIL’s goal was to create a non-invasive blood test that could screen asymptomatic patients for several types of cancer. In 2017, Illumina spun GRAIL off as a standalone, privately held company. On September 21, 2020—the first day of the Class Period—Illumina announced its plan to re-acquire GRAIL for $8 billion.

The complaint alleges that, throughout the Class Period, Defendants repeatedly justified the GRAIL acquisition to investors, including by stating the acquisition “will result in the savings of tens of thousands of lives” and that the acquisition was “creating long-term shareholder value.” However, Defendants failed to disclose that certain Illumina insiders had personal financial motives for acquiring GRAIL, and that acquiring GRAIL was not in the Company’s best interest. As a result of Defendants’ misrepresentations and omissions, Illumina stock traded at artificially inflated prices during the Class Period.

The truth began to emerge on March 30, 2021, when the U.S. Federal Trade Commission (the ‘FTC”) sued to block Illumina’s acquisition of GRAIL. In response, Illumina stated that it “will opposed, the [] FTC’s challenge to its previously announced acquisition of GRAIL.” Then, as the market was closing on July 13, 2021, Reuters reported that European Union regulators were demanding concessions from GRAIL. A month later, on August 19, 2021, Illumina announced that it had closed its acquisition of GRAIL. Early the following year, on January 16, 2022, the Financial Times reported that Illumina’s CEO “was confident Illumina would prevail in a case launched against [European Union regulators]” asserting that the European Union did not have jurisdiction to investigate the GRAIL deal.

The true reason for Defendants’ insistence on pursuing GRAIL did not come to light until May 1, 2023, when Carl Icahn published an open letter to Illumina shareholders questioning the GRAIL acquisition. On May 25, 2023, Carl Icahn secured a seat on the Company’s Board of Directors following a proxy contest. The next month, after the market closed on June 26, 2023, Illumina announced a multi-year cost cutting plan. Then, after the market closed on August 10, 2023, Illumina announced it was the target of an SEC investigation regarding the GRAIL acquisition, including, among other things, “the conduct and compensation of certain members of Illumina and GRAIL management.” On October 17, 2023, Carl Icahn filed a derivative and class action suit in Delaware Court of Chancery Court against current and former members of Illumina’s board of directors. Finally, after the market closed on November 9, 2023, Illumina took an $821 million goodwill impairment related to GRAIL. As a result of these disclosures, the price of Illumina stock declined precipitously.

The filing of this action does not alter the previously established deadline to seek appointment as Lead Plaintiff. Pursuant to the November 10, 2023 notice published in connection with the Kangas action, under the Private Securities Litigation Reform Act of 1995, investors who purchased or otherwise acquired Illumina securities during the Class Period may, no later than January 9, 2024, seek to be appointed as Lead Plaintiff for the Class. Any member of the proposed Class may seek to serve as Lead Plaintiff through counsel of their choice, or may choose to do nothing and remain a member of the proposed Class.

If you wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact Scott R. Foglietta of BLB&G at 212-554-1903, or via e-mail at scott.foglietta@blbglaw.com.