Industry Buzz

Antitrust Regulators Derail Plans for Illumina-Grail Cancer Genomics Powerhouse

You could almost hear the gasp from the cancer genomics market when Illumina announced plans to shell out $8 billion–$3.5 billion in cash and $4.5 billion in common shares—to re-acquire Grail, the liquid biopsy firm it spun off in 2016. Acquiring Grail’s suite of multi-cancer early detection (MCED) tests, including the highly touted blood-based screening test called Galleri that uses methylation sequencing for ultra early detection of over 50 different types of cancers scheduled to launch in 2021, would significantly bolster Illumina’s position in multi-cancer diagnostics. And for that very reason, the deal is now in serious jeopardy.

FTC Sues to Block Illumina’s Grail Acquisition

At the end of March, the US Federal Trade Commission (FTC) said that it planned to go to court seeking a temporary restraining order to stop the deal pending an administrative trial to determine whether it’s kosher under antitrust laws. The FTC claims that the acquisition will suppress MCED innovation in the US and make Illumina’s next-generation sequencing (NGS) platforms the only viable option for such tests. According to the agency, this would put Illumina in the position to raise prices charged to Grail competitors for NGS instruments and consumables thereby also impede their research and development efforts.

Regulatory Obstacles in Europe

Apparently, the FTC isn’t the only with such concerns. On its face, Illumina’s acquisition of Grail is a US affair with only indirect effects on non-US markets. But on April 20, even as the US administrative trial was scheduled to begin, a new regulatory obstacle unexpectedly emerged from the EU. Specifically, the European Commission’s Directorate-General of Competition announced that it plans to review the deal under its controversial new guidance that allows the Commission to demand notification of a deal even when the member states involved don’t.

“The combined [Illumina/Grail] entity “could restrict access to or increase prices of next-generation sequencers and reagents to the detriment of Grail’s rivals active in genomic cancer tests following the transaction,” according to a Commission statement. Responding in a statement of its own, Illumina CEO Francis deSouza expressed the company’s belief that the European authorities lack jurisdiction to review the acquisition.

Takeaway

Illumina remains defiant and determined to go through with the Grail acquisition, which has been approved by the board of directors of both companies. The company denies the charges of throttling competition, insists that the deal is in the best interest of patients and promises to vigorously defend it in court.

 But Illumina has been down this road before. In January 2020, regulatory opposition from the FTC and authorities in UK forced the San Diego-based sequencing company to drop its planned $1.2 billion acquisition of Pacific Biosciences. So, it’s hardly surprising that investors and analysts remain skeptical over the likelihood that the Grail deal will encounter a similar fate. 

 

CLOSE TO VIEW ARTICLE x

You have 2 articles left to view this month.

Your 3 Free Articles Per Month Goes Very Quickly!
Get a 3 month Premium Membership to
one of our G2 Newsletters today!

Click on one of the Newsletters below to sign up now and get unlimited access to all articles, archives, and tools for that specific newsletter!

Close

EMAIL ADDRESS


PASSWORD
EMAIL ADDRESS

FIRST NAME

LAST NAME

TITLE

COMPANY

PHONE

Try Premium Membership

(-00000g2)