US agency Federal Trade Commission (FTC) has rejected biotechnology company Illumina’s $7.1bn vertical acquisition of cancer test solutions developer Grail.
The deal has been rejected by the agency over concerns that it would stifle competition in the US market for research, development, and commercialisation of cancer tests.
In September 2020, Illumina reached a definitive agreement for the acquisition of Grail for cash and stock consideration.
The FTC first lodged an administrative complaint in April 2021 and authorised a federal court to block the proposed merger deal.
In April 2021, the European Commission (EC) accepted a referral request from France, the Netherlands, Belgium, Iceland, Greece, and Norway, to review the proposed acquisition of Grail by Illumina.
In August 2021, Illumina announced that it had completed the acquisition of Grail, while the EC’s review was still ongoing.
Grail manufactures non-invasive and early-detection liquid biopsy tests that use DNA sequencing to detect early signs of several types of cancer in asymptomatic patients. The company’s main product is the Galleri multi-cancer early detection test (MCED).
Illumina is a major producer of next-generation sequencing (NGS) platforms, utilised for analysing genetic material from the blood samples drawn for MCED tests.
According to FTC, the deal is anticipated to reduce innovation for MCED tests in the US market, besides leading to increased prices and decreased choice and quality of tests.
The FTC also contended that Illumina may remain the only viable supplier of NGS platforms required for MCED tests and it can easily rule out Grail’s competitors by increasing the costs or withholding access to supply, service, or new technologies.
In response to the order from the FTC, Illumina stated that it will appeal to a US Court of Appeals to seek a review of the decision. The company expects a decision in court by late 2023 or early 2024.
The FTC’s order came after the EC rejected the acquisition in September 2022 to protect competition between early cancer detection test developers. The company’s petition is pending before the European Court of Justice (ECJ).