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Illumina In Talks To Acquire Cancer Startup Backed By Jeff Bezos, Bill Gates At $8B: Report

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Illumina In Talks To Acquire Cancer Startup Backed By Jeff Bezos, Bill Gates At $8B: Report

A week after filing for an initial public offering with the Securities and Exchange Commission, reports are suggesting that the cancer detection startup Grail Inc. could be acquired by a larger healthcare company.

What Happened: According to Bloomberg, Illumina Inc (NASDAQ: ILMN) is valuing Grail at $8 billion in their merger talks. Both companies haven't yet release any official comments on the matter.

Grail was established as an independent company back in 2016, with a majority stake held by Illumina. In 2017, the startup repurchased its stocks through systematic financing rounds and gradually Illumina’s stake dropped below 20%.

Based on regulatory filings, Bloomberg reported that the private company has raised over $1.9 billion and estimates its value at approximately around $6 billion.

Why Does It Matter: Some of Grail's high profile backers include Microsoft Corporation (NASDAQ: MSFT) co-founder Bill Gates and Amazon.com Inc. (NASDAQ: AMZN) CEO Jeff Bezos.

In January, Illumina was considering a $1.2 billion acquisition of Pacific Biosciences. However, the FTC blocked the proposed deal, citing monopolistic practices in the next-generation DNA sequencing market.

Since Grail was originally established by Illumina, many synergies between the companies could prove to be advantageous. However, with the takeover bid, Illumina could end up competing directly with its clients, Bloomberg noted.

Illumina is Grail’s sole supplier of sequencers for genome testing, and the company's genetics tests and pharmaceutical research could be complemented by Grail’s cancer research studies.

Price Action: Illumina stock was on a downtrend on Wednesday, closing 8.44% lower at $322.47.

 

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