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September 22, 2020updated 01 Nov 2021 7:32am

Illumina to acquire Grail in a deal worth $8bn

Biotechnology company Illumina has signed a definitive agreement to acquire multi-cancer blood test developer Grail for cash and stock consideration of $8bn.

Biotechnology company Illumina has signed a definitive agreement to acquire multi-cancer blood test developer Grail for cash and stock consideration of $8bn.

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What is driving M&A activity in the MedTech space?

The COVID-19 pandemic has left an indelible mark on the MedTech landscape. Changes in how healthcare is delivered, and new treatment modalities, are creating opportunities and challenges for both new and traditional players. As companies sought out opportunities during the pandemic-driven downturn, the number and value of mergers and acquisition deals in the MedTech space increased. Companies worked to reposition themselves in the newly aligned healthcare world, but with further economic turmoil expected: will these trends be repeated? And what tech areas should firms be looking to expand their capabilities into? GlobalData’s report, “Themes driving M&A activity in the Medical Devices Sector, Q1 2022,” draws upon GlobalData’s extensive MedTech deals databases, highlighting major trends and hot themes in M&A activity. This report will assist you in:
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  • Knowing the key deals that occurred during Q1 2022
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The deal consists of $3.5bn in cash and $4.5bn in shares of Illumina common stock, subject to a collar. Additionally, Illumina will make future payments to Grail stockholders, representing a tiered single-digit percentage of certain Grail-related revenues.

Illumina currently owns 14.5% of Grail’s outstanding shares and approximately 12% on a fully diluted basis. Grail was established by Illumina in 2016 and became a spin-out later. The company specialises in the development of blood tests for the early detection of various cancer types.

The company raised approximately $2bn to fund the development of its technology platform and multi-cancer screening test Galleri. An older version of the test was able to identify over 50 cancer types, including those, which have no recommended screening in the US.

The acquisition of the Grail will expand Illumina’s portfolio with the addition of cancer screening, diagnosis and cancer monitoring solutions. It is also expected to enhance the position of the company in clinical genomics.

Illumina president and CEO Francis deSouza said: “Over the last four years, Grail’s talented team has made exceptional progress in developing the technology and clinical data required to launch the Galleri multi-cancer screening test. Galleri is among the most promising new tools in the fight against cancer, and we are thrilled to welcome Grail back to Illumina to help transform cancer care, using genomics and our NGS platform.”

Galleri is expected to launch commercially next year as a multi-cancer, laboratory-developed test for early cancer detection from the blood. Illumina plans to support Grail’s commercialisation efforts by offering its clinical and manufacturing capabilities.

Grail also has plans to develop additional blood-based tests for cancer diagnosis, detection and post-treatment monitoring of cancer patients. The company will operate as a standalone division within Illumina after the closing of the transaction.

Grail CEO Hans Bishop said: “We believe multi-cancer early detection technology could address a tremendous unmet need and reduce the cancer burden worldwide. Combining forces with Illumina enables broader and faster adoption of Grail’s innovative, multi-cancer early detection blood test, enhancing patient access and expanding global reach.”

The transaction is expected to close in the second half of the next year. It is subject to customary closing conditions, including applicable regulatory approvals.

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Free Report
img

What is driving M&A activity in the MedTech space?

The COVID-19 pandemic has left an indelible mark on the MedTech landscape. Changes in how healthcare is delivered, and new treatment modalities, are creating opportunities and challenges for both new and traditional players. As companies sought out opportunities during the pandemic-driven downturn, the number and value of mergers and acquisition deals in the MedTech space increased. Companies worked to reposition themselves in the newly aligned healthcare world, but with further economic turmoil expected: will these trends be repeated? And what tech areas should firms be looking to expand their capabilities into? GlobalData’s report, “Themes driving M&A activity in the Medical Devices Sector, Q1 2022,” draws upon GlobalData’s extensive MedTech deals databases, highlighting major trends and hot themes in M&A activity. This report will assist you in:
  • Understanding value and volume trends in M&A from Q1 2018 to Q1 2022
  • Understanding regional trends in M&A activity
  • Understanding which medical device sectors are leading M&A activity, and which are lagging
  • Understanding the leading tech trends in Q1 2022 M&A activity
  • Knowing the key deals that occurred during Q1 2022
Download the full report to understand what to expect and how to align your business for success.
by GlobalData
Enter your details here to receive your free Report.

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