ILMN - Illumina: Marriage Made In Hell Is (Finally) Over - Assessing Impact Of GRAIL Spin-Out

2024-06-28 04:35:51 ET

Summary

• Illumina has finally completed the divestiture of GRAIL, ending a disastrous chapter in its history.
• The Company paid $8bn to acquire the cancer testing business it helped to create, which proved to be a disastrous mistake, triggering three years of share price losses.
• Newly spun-out GRAIL faces challenges in the competitive cancer testing market, while Illumina returns to its profitable gene sequencing business.
• GRAIL's target market is still in its infancy, and the company's high cash burn is problematic. Shares of the newly listed company look cheap, but the current valuation is arguably fair.
• ILMN trades at ~4x forward sales, and will now renew its focus on a market it knows and which has historically served it well, helping the company achieve a share price of >$500 - Illumina is the horse to back in my view.

Investment Overview - Illumina Says Goodbye To GRAIL, & It's Worst Ever Business Decision

This week, Illumina ( ILMN ), the San Diego, California-based gene sequencing giant, brought an end to a disastrous chapter in its relatively short history by completing the divestiture of GRAIL, the cancer testing business it helped to found....

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