The US Federal Trade Commission (FTC) has filed an administrative complaint and authorised a federal court to block Illumina’s $7.1bn proposed acquisition of Grail, claiming the deal will harm competition in the US market for early-stage cancer diagnostics.

Grail makes a non-invasive, early detection liquid biopsy test that can screen for multiple types of cancer in asymptomatic patients at very early stages using DNA sequencing.

Meanwhile Illumina is the only provider of DNA sequencing that is viable for multi-cancer early detection (MCED) in the US.

Although the two companies operate in the separate markets of DNA sequencing and cancer diagnostics, Illumina could use its dominant position in sequencing to raise prices charged to Grail competitors for next-generation sequencing instruments and consumables, the FTC said.

Illumina could also impede Grail competitors’ research and development efforts or refuse or delay executing license agreements that all MCED test developers need to distribute their tests to third-party laboratories.

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FTC acting chairwoman Rebecca Slaughter said: “The vast majority of cancers, which account for about 80% of cancer deaths, are only detected after patients exhibit symptoms. That is often too late to treat effectively.

“The MCED test is a game changer for cancer patients and their loved ones. If this acquisition is consummated, it would likely reduce innovation in this critical area of healthcare, diminish the quality of MCED tests, and make them more expensive.”

Illumina has said it disagrees with the FTC and will oppose its action, arguing that it does not compete with Grail in any way and that the merger will get early cancer tests to patients more quickly and affordably.

Illumina CEO Francis deSouza said: “We have a deeply vested interest in ensuring that all organizations have equal and fair access to high quality, reliable and cost-effective sequencing to enable them to develop breakthrough products, such as liquid biopsy, and make them accessible to the greatest number of patients possible, quickly and safely.”

An administrative trial is scheduled to start on 24 August, with the FTC seeking a preliminary injunction to stop the deal pending the conclusion of the trial.

Grail CEO Hans Bishop said: “Combining Grail’s innovative multi-cancer early detection test with Illumina’s experience and scale will enable more patients in both the United States and worldwide to garner access to Grail’s test faster.

“We continue to believe that together we could transform cancer care by catching more cancers earlier.”