KANGAS PART 1 Wow, a heavily amended version of the "Kangas" federal complaint was just filed with the Southern District of California Court. Hundreds of amendments, I'll just except some of the more interesting quotes. Here are a few themes: - Huge conflict of interest from Aravanis advising the Illumina board to buy GRAIL while he held over $10M worth of GRAIL shares (duh). - Huge conflict of interest from Klausner investing >$100M in GRAIL when he knew is was in the process of acquired by Illumina. - Illumina falsely claiming it did not control GRAIL so as to avoid declaring numerous executive/board conflicts of interest (this class of "VIE" issue lay at heart of the Enron collapse and criminality). - Numerous false statements by execs regarding pending FDA approval (this continues to this day IMO including the recent GRAIL "investor day"). - Numerous false statements by execs on the need to close the deal to "save lives" when there is/was no evidence for the claim. Here we go! "As former GRAIL Director of Key Accounts explained, GRAIL’s commercial plan—which involved seeking reimbursement from hospital systems and other healthcare networks—was “preposterous” and based on “dreams and magic”. Similarly a former Galleri Sales Consultant reported that Defendants were “overstating what [Galleri] can do when they didn’t have the data,” that “everything” concerning GRAIL’s prospects was based on “a hypothetical,” and there were no “real-world studies completed” that were needed in order for Galleri to be successful." "[X], who worked with both Defendants Aravanis and Ofman over his over-decade long career at Illumina and GRAIL, confirmed GRAIL’s senior management was aware of these facts, and that large health systems LAUGHED AT GRAIL because they were unwilling to pay for Galleri without reimbursement, Defendant Ofman participated in presentations to these healthcare systems, and these facts were discussed at weekly or bi-weekly meetings with GRAIL senior management." "In reality, as would be later uncovered by a then-current Illumina director, Illumina’s Board of Directors, including Defendant deSouza, closed the GRAIL transaction because of their “personal stake” in the deal—self-interested motivations that were never properly disclosed to investors. Moreover, rather than follow “good corporate governance practices” and “recuse” Defendant Aravanis from decisions concerning GRAIL, in truth, Aravanis served as a lead “cosponsor” of the acquisition, presented the deal to Illumina’s Board, “negotiated” the deal’s terms with his prior employer, and participated in the Board’s decision-making." Part 2 to follow...
Tracy W.
3mo
Move fast and break things should never have been a mindset in healthcare, but yet it’s pervasive. Happy to see this chapter in MDx close as quickly as possible and patients become priority.
Cao Tien Dung
3mo
Interesting
Commercial Strategy & Marketing Effectiveness
3mo"...defendants were “overstating what [Galleri] can do when they didn’t have the data,” and there were no “real-world studies completed” that were needed in order for Galleri to be successful." ..."that large health systems LAUGHED AT GRAIL because they were unwilling to pay for Galleri without reimbursement," The strategy seemed to be "fake til you make it"...straight out of the tech-bro playbook circa 2010.