The Federal Trade Commission (FTC) has ordered Illumina, a DNA sequencing company, to divest its acquisition of Grail, a cancer test developer, valued at $7.1 billion. The FTC’s decision comes after an administrative judge dismissed the initial challenge in September, stating the deal would harm innovation and competition in the market for multi-cancer early detection tests. The FTC’s recent order claims the acquisition would result in decreased choice, quality, and innovation in cancer detection tools, which is critical in the early detection of cancer.
Illumina has expressed its intention to appeal the FTC’s decision in federal court, stating that it believes the decision would harm shareholders’ interests. The European Union’s executive body, the European Commission, blocked the Illumina-Grail deal last year over similar concerns, and Illumina has challenged the decision.
The acquisition of Grail has sparked opposition from activist investor Carl Icahn, who launched a proxy fight last month, seeking seats on Illumina’s board of directors and urging the company to unwind the deal. His resistance to the deal is rooted in Illumina’s decision to close the acquisition without obtaining antitrust regulators’ approval.
Challenging the European Commission and FTC decisions in court, according to Illumina, would expand the availability, affordability, and profitability of Grail’s groundbreaking Galleri test in the multi-cancer screening market worth over $44 billion.
Opposition to the deal by both the FTC and European Commission underscores the importance of competition and innovation in the healthcare industry, particularly in the development of effective and affordable tools for early cancer detection.