Despite FTC Challenges Opposing Grail Acquisition, Illumina Committed To Pursue Deal: Report

The Federal Trade Commission (FTC) is reportedly looking to stop Illumina Inc’s (NASDAQ: ILMN) $7.1 billion proposed acquisition of Grail Inc. FTC believes that the deal would slow innovation in cancer tests.

• Illumina was the only U.S. company to provide DNA sequencing for multi-cancer early detection tests, the FTC said.
• Grail makes a non-invasive, early detection biopsy test to screen for many kinds of cancers using DNA sequencing. It has developed a test called Galleri, which is currently available only to participants in clinical studies.
• “Illumina will vigorously defend its acquisition of Grail because we strongly believe it is in the best interest of patients,” spokeswoman Karen Birmingham said in a statement.
• The FTC commissioners voted 4-0 to challenge the deal.
• The FTC’s lawsuit alleges the deal would slow down innovation in the U.S. market for multicancer early detection tests, notes the Wall Street Journal.
• As Illumina would become the only choice for test developers, it could raise the prices it charges to Grail’s competitors and hamper their research and development efforts, the commission alleged.
• Illumina said the FTC’s lawsuit was misguided, and the deal would not result in fewer players.
• Grail was founded by Illumina and later spun off as a standalone company.
• Illumina holds about 12% of Grail’s shares, according to a statement issued when the deal was announced in September last year.
• Price Action: ILMN shares are down 0.3% at $367.78 in premarket trading on the last check Wednesday.