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Illumina closes $8bn Grail merger

Illumina has finalised its acquisition of cancer screening company Grail, despite both antitrust concerns from the EU and a pending legal challenge by the US Federal Trade Commission (FTC). 

Grail, backed by Jeff Bezos and Bill Gates, is a cancer diagnostics firm originally spun-out of Illumina in 2016. It has been developing liquid biopsy tests that examine blood samples for genetic signs of cancer. This test can detect 50 different cancers before they show symptoms. Illumina argues that closing the merger now is crucial for the future of cancer detection and treatment. They claim the deal will save lives by making early detection screening available to as many people as possible.

Legal challenges

The deal is currently being investigated by EU judges in Brussels due to concerns it may reduce competition and innovation. In April 2021, Illumina filed a lawsuit against the European Commission. Illumina claimed the investigation would stifle the development of important medical technology. Illumina also claims that as Grail has no presence in Europe, the European Commission has no jurisdiction to review the merger. However, Illumina’s challenge will not be heard in court until later this year.

In addition, the US FTC has a pending lawsuit to prevent the deal. This is due to concerns the merger may diminish innovation in the US market for multi-cancer early detection tests. The trial is scheduled to begin next week in the FTC’s administrative court.

Illumina pushes forward despite investigations

Despite these challenges, the genetic sequencing giant announced yesterday that it has closed its merger with Grail. This is due to concerns from Illumina that the transaction would not get approved before the deal expiry date of 20th December 2021.

This is a risky move – by pushing ahead with the merger, Illumina risks being fined as well as years of legal complications.

Statement from Illumina

Illumina has stated they will hold Grail as a separate company while the EU investigation is ongoing. This will allow the two companies to be easily separated if regulators decide to block the deal.

In a statement, Illumina said:

“Illumina’s acquisition of Grail will accelerate access and adoption of this life-saving test worldwide. By holding Grail separate while proceedings are ongoing, Illumina is positioned to abide by whatever final decision is reached in these legal processes.”

Francis deSouza (CEO of Illumina) said: “We felt a moral obligation even to make sure this deal does get through the regulatory process and we feel that by acquiring the company and keeping it separate, we achieve both aims.”

Photo by Julia Koblitz on Unsplash

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