FTC Seeks To Block Illumina’s Proposed $7.1 Bln Acquisition Of Grail

FTC Seeks To Block Illumina’s Proposed $7.1 Bln Acquisition Of Grail

April 6, 2021

The U.S. Federal Trade Commission or FTC has challenged Illumina Inc.’s proposed $7.1 billion acquisition of cancer detection test maker Grail, alleging that a merger would harm competition for life-saving Multi-Cancer Early Detection or MCED tests in the United States.

In a statement, the FTC said it has filed an administrative complaint and authorized a federal court lawsuit to block the proposed acquisition. The FTC will file a complaint in the U.S. District Court for the District of Columbia seeking a Temporary Restraining Order and Preliminary Injunction to stop the deal pending an administrative trial, which is scheduled to begin on August 24.

Meanwhile, Illumina opposed FTC’s challenge saying it will pursue its right to proceed through all legal options to complete the acquisition. The company expects the deal to accelerate the adoption of a breakthrough multi-cancer early detection blood test – Galleri multi-cancer screening test – which is seen as the most promising new tools in the fight against cancer.

Grail was founded by Illumina and was later spun off as a standalone company in January 2017, powered by Illumina’s NGS technology. It was in September last year that Illumina agreed to buy GRAIL in a cash and stock transaction then valued at about $8 billion. Illumina already holds 14.5% of GRAIL’s shares, and approximately 12% on a fully diluted basis. Illumina was expecting to close the deal in the second half of 2021.

Grail’s investors also include Bill Gates and Jeff Bezos, among others.

Grail makes a non-invasive, early detection liquid biopsy test that can screen for multiple types of cancer in asymptomatic patients at very early stages using DNA sequencing. It is in the process of developing the technology and providing clinical data required to launch Galleri.

Meanwhile, Illumina is the only provider of DNA sequencing that is a viable option for these MCED tests in the country. MCED tests could be used to detect up to 50 types of cancer.

According to FTC, Grail is one of several competitors racing to develop these liquid biopsy tests, which analyze a sample of a patient’s blood or other fluid through DNA sequencing.

In the complaint, the FTC alleged that the proposed deal would reduce innovation in the U.S. market for MCED tests.

The agency also contended that Illumina, as the only viable supplier of a critical input, can raise prices charged to Grail competitors for NGS instruments and consumables. In MCED tests, developers have no choice but to use Illumina NGS instruments and consumables.

It is argued that Illumina can also impede Grail competitors’ research and development efforts, or refuse or delay executing license agreements that all MCED test developers need to distribute their tests to third-party laboratories.

However, Illumina said it has offered contractual guarantees for clinical oncology customers of equal and fair access to Illumina sequencing, and a commitment to drive down prices by more than 40 percent by 2025.

In December 2019, the FTC had challenged Illumina’s proposed acquisition of Pacific Biosciences of California.

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