Carl Icahn's proxy fight with Illumina (ILMN) escalated Monday with a new open letter as well as from a decision from the Federal Trade Commission (FTC).

The FTC is now ordering the biotech to unwind its $8 billion deal with cancer testing company Grail, saying that its ownership would restrict competition in developing cancer tests.

Icahn, who has a 1.4% stake in Illumina, wants to appoint three members to the company's board as well as bring back a former CEO to help with this task, to right-size what he sees as a failing trajectory.

"After speaking with numerous shareholders, we believe it is unconscionable that the board of directors still entrusts [current CEO, Francis] deSouza with running our potentially great company. During his tenure, not only has the company lost $50 billion of shareholder value but many of his talented executives have left or are in the process of leaving," Icahn wrote in a letter Monday.

The letter is the fifth Icahn has published since launching the proxy fight for control of the board last month, after months of private negotiations fell apart.

The FTC decision to bar the acquisition of Grail, which Illumina completed last year, follows a similar ruling late last year from the European Commission. Both regulators have warned the company could face fines that would result in billions in losses if it doesn't comply.

Illumina is already appealing the decision in Europe, and said Monday it would seek the same for the FTC. The company believes it has strong case since an FTC judge already sided with the company in September.

But in its statement Monday, Illumina added that if it does not prevail in the EU or with the FTC, "the company expects to move expeditiously to divest Grail."

Ultimately, that's what Icahn wants the company to do, according to RBC Biotech Analyst Conor McNamara.

"Some of his concerns are shared by shareholders, that GRAIL has been a distraction," McNamara said of the $8 billion deal.