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UBS Downgrades Illumina to Neutral; Expresses Doubts About Grail Deal

NEW YORK – Investment firm UBS said on Monday that it is downgrading Illumina's stock from a 'buy' to a 'neutral' rating, following Illumina's announcement that it plans to acquire cancer diagnostics firm Grail for $8 billion in cash and stock.

UBS also lowered its price target for Illumina's stock to $285 from $390 per share.

In a note to investors, UBS analyst Dan Brennan wrote that "while the pan-cancer screening opportunity Grail's lead test (Galleri) addresses is significant, the revenue trajectory is uncertain and guidance calls for material [earnings per share] dilution given Grail's operating loss and associated spending ramp."

He noted that Illumina's stock has declined about 23 percent since rumors about the pending deal were reported, adding that "given the material shift in strategy this deal signifies, combined with dilution and limited visibility, we see the risk reward as more balanced and downgrade to Neutral."

JP Morgan also downgraded Illumina's stock on Monday and several other analysts cut their price targets for the company.

In Tuesday morning trading on the Nasdaq, Illumina's stock was down more than 2 percent at $263.59 per share.

The Scan

Interfering With Invasive Mussels

The Chicago Tribune reports that researchers are studying whether RNA interference- or CRISPR-based approaches can combat invasive freshwater mussels.

Participation Analysis

A new study finds that women tend to participate less at scientific meetings but that some changes can lead to increased involvement, the Guardian reports.

Right Whales' Decline

A research study plans to use genetic analysis to gain insight into population decline among North American right whales, according to CBC.

Science Papers Tie Rare Mutations to Short Stature, Immunodeficiency; Present Single-Cell Transcriptomics Map

In Science this week: pair of mutations in one gene uncovered in brothers with short stature and immunodeficiency, and more.