On Sunday, the premier maker of genome sequencing machines, Illumina, revealed its plan to offload Grail, a developer of cancer tests it had previously obtained for $7.1 billion in 2021.
The decision was initiated two days post-Illumina suffering a loss in a federal appellate court case. The court majorly reinforced a ruling from the Federal Trade Commission mandating Illumina to terminate its Grail contract due to antitrust issues.
Antitrust specialists perceived the case as a testing platform for regulatory efforts to prevent extensive corporations from acquiring budding innovators.
Hurdles also surfaced in Europe for the deal. Illumina, headquartered in San Diego, had further encountered an acquisition block from the European Union in September 2022. Consequently, it had publically announced its intent to disinvest the start-up in case of unsuccessful appeals.
Jacob Thaysen, the chief executive officer of Illumina, claimed in a declaration, “We are determined to swiftly disinvest Grail in a way that enables the continuity of its technology for patient benefits. I am confident about the future prospects of Illumina, our long-term success and our ongoing commitment to concentrate on our fundamental business and customer support.”
Grail, recognized for its innovation in early detection of several cancers, had its origin as a research undertaking within Illumina. It became an independent entity in 2016. Despite not being a direct competitor in gene sequencing, Grail utilises gene sequencing for its cancer blood tests.
Illumina remained determined and proceeded with the acquisition of Grail, overruling the preliminary disapproval from the F.T.C. Despite the F.T.C.’s contention that the procurement would stifle U.S. market creativity and inflate prices, Illumina maintained its belief in a favourable court outcome.
The divestment of Grail is slated through a third-party sale or a capital market deal, as stated by the company, aiming at finalizing the transaction by the second quarter next year.
Post the court affirming the commission’s opposition to the deal, other tech behemoths and leaders in their respective industries may face possible F.T.C restriction on acquisition efforts. Lina Khan, the F.T.C chair, has adopted a vigorous approach towards mergers possibly posing harm to the economy since taking office in 2021.
Illumina, a Gene-Sequencing Company, to Sell Cancer Test Developer
