Illumina CEO Francis deSouza has stepped down after a lengthy proxy battle with activist investor Carl Icahn. Yahoo Finance health care reporter Anjalee Khemlani breaks down the timeline of events, while also commenting on Novartis' $3.5 billion acquisition deal with Chinook Therapeutics.

Video Transcript

JULIE HYMAN: Illumina CEO Francis deSouza has officially stepped down that follows pressure from Carl Icahn to remove himself from the position after deSouza's push to acquire health care company Grail was shut down by regulators.

"Yahoo Finance's" Anjalee Khemlani joins us now with the details. Anja, even though there's been this pressure, this was still unexpected news, especially since it follows after earnings.

ANJALEE KHEMLANI: That's right. Not only earnings, but also from the wind that Francis basically face not losing in that proxy battle back in May, which ousted the board chair, John Thompson, at the time. So what we saw then was shareholders voting for one of Icahn's three nominees for the board and CEO Francis deSouza surviving that. But now, stepping down as Carl Icahn continues to put pressure on the company to divest the Grail assets.

So what happened with Grail? Just a recap on that. The company had first divested or rather spun it out back in 2016 for about $2 billion. The company then looked at re-acquiring it. Announcing that in 2021 for $8 billion. Regulatory decisions had not yet been complete by the time Illumina wrapped the deals, both in the US and the EU. They faced blocks concerns about market competition being the major point there.

And it's really costing Illumina a lot of money, about $800 million a year just to hang on to according to reports. So that's where the concern comes in and where you've seen the pressure mounting from Carl Icahn. So this, essentially, ends that proxy battle and the pressure there. But they still face the decision of divesting Grail moving forward.

BRAD SMITH: Anjalee, we're also watching another story in the health care space. Novartis, they've agreed to acquire Chinook in a $3.5 billion deal here. What can tell us about that?

ANJALEE KHEMLANI: That's right. So Chinook is a kidney disease company. They have two treatments that they've got in the pipeline, clinical stage. This is really a good target for a company like Novartis. We know a lot of these large pharma companies are looking for the rare space as pressure mounts on them from things like the Medicare drug pricing negotiations.

They've been looking at areas where they can really ramp up disease stages and assets that won't necessarily be targets of those negotiations. We know Novartis earlier this year announced that it was going to cut back on its pipeline. And that included on the cancer side. So this definitely builds up and bolsters its pipeline a little bit. And it'll be interesting to see what other moves it makes to make up for the cuts it announced earlier this year.

BRAD SMITH: Anjalee, thanks so much for tracking these stories for us. Helping us break down the latest and greatest here in the health care landscape. Appreciate it.