2021-08-19| M&A

Illumina Completes GRAIL Acquisition Without Approval From FTC

by Rajaneesh K. Gopinath
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After 11 months since first announcing its intent to acquire, Illumina has finally snapped up GRAIL Inc. for $7.1 billion. On August 18th, the sequencing giant said it has completed the acquisition despite the legal battle against the FTC and EU antitrust regulators.

GRAIL, a cancer detection firm backed by top investors, including Bill Gates and Jeff Bezos, was founded by Illumina in 2016 but spun out as a standalone company. Its liquid biopsy test, Galleri, is capable of detecting 50 different cancers before they become symptomatic. Although the blood test is yet to bag regulatory approval, it is available for older patients with a higher cancer risk under a CLIA waiver.

In the recently concluded ASCO meeting in June, GRAIL announced that interim results from the PATHFINDER study showed an earlier version of Galleri accurately detected 29 cancers across 13 types. Of the 23 new cancers detected, GRAIL said 39% were localized, and more than half were detected at early stages.


Investigations By FTC and EC Antitrust Regulators

Illumina’s acquisition of GRAIL was hindered by the FTC in April this year, citing that this transaction would monopolize the market. Soon after, the European Commission also said that EU antitrust regulators will probe into the proposal following a request made by six countries.

In a press statement, the FTC announced that the administrative trial is scheduled to begin on Aug. 24, 2021, following a prehearing conference the previous day. The EU, on the other hand, was originally expected to complete its review before November 29, 2021. However, it got postponed as Illumina is requested to provide more acquisition-related data.

Illumina and GRAIL extended their previously set acquisition deadline from September to December 2021. However, if the EU delays the trial, they run the risk of exceeding that deadline. As a result, Illumina has rushed to complete the acquisition even before the FTC and EU rulings.

However, Illumina will hold GRAIL as a separate entity. This way, it is positioned to abide by whatever final decision is reached in the legal processes.


A Preemptive Measure to Accelerate Cancer Detection

Illumina pointed out that GRAIL has no business in the EU and believes that the European authorities do not have jurisdiction to review the acquisition. Besides, there is no legal impediment to acquiring GRAIL in the US. Therefore, they want to go ahead with the transaction.

Secondly, most antitrust lawsuits are for horizontal acquisitions, but Illumina and GRAIL are not competitors in the same market. It is a vertical acquisition, and hence, there is no question of market monopoly.

Both companies argued that the acquisition will accelerate the adoption of Galleri and improve the survival rates of patients through early cancer detection. At present, the test costs $950 because it is not covered by insurance. With the acquisition, Illumina could expedite Galleri’s clinical trials and bring the product to the market at an affordable price.

Additionally, Illumina’s expertise in market development and access has already resulted in coverage of genomic testing for over 1 billion people worldwide. This will help it obtain coverage and reimbursement for the Galleri test too.

“Just as we are now able to screen for early-stage diabetes and high cholesterol, we will soon be able to conduct multi-cancer early detection with a simple blood test in your doctor’s office,” said Francis deSouza, CEO of Illumina. “Since early detection of cancer saves lives, this new genomic test will be nothing short of transformational for human health and the economics of healthcare.”

“The merger with Illumina will get the Galleri test to people far faster. We aim to accelerate this process so the test will be available in doctors’ offices everywhere, fully reimbursed,” said Hans Bishop, CEO of GRAIL. “A one-year acceleration of access to the Galleri test for the US population has the potential to save 10,000 lives over a 9-year period.”

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