The Federal Trade Commission (FTC) has issued an Opinion and Order requiring DNA sequencing provider, Illumina Inc (NASDAQ:ILMN), to divest Gral Inc, which makes a multi-cancer early detection (MCED) test.
In a statement on its website, the FTC said the deal would stifle competition and innovation in the US market for life-saving cancer tests. The Opinion reverses an Administrative Law Judge’s initial decision that dismissed the antitrust charges in a complaint brought by FTC staff, it added.
“The Commission found that the acquisition would diminish innovation in the US market for MCED tests while increasing prices and decreasing choice and quality of tests,” the FTC said. “This is extremely concerning given the importance of swiftly developing effective and affordable tools to detect cancer early.”
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Grail makes non-invasive, early-detection liquid biopsy tests that can screen for multiple types of cancer in asymptomatic patients at very early stages using DNA sequencing. The company is one of several competitors racing to develop and commercialize these life-saving liquid biopsy tests.
Illumina is the dominant producer of next-generation sequencing (NGS) platforms, which are used to analyze genetic material from the blood samples drawn for MCED tests. These tests could be used to detect multiple types of cancer, most of which are not screened for at all today.
The FTC said its Opinion and Order will now become final unless respondents file a petition for review in a federal Court of Appeals within 60 days from the date of the service of the Order.
Illumina said it will appeal the FTC’s decision and “intends to file a petition for review promptly with a US Court of Appeals and will seek expedited treatment of the appeal.”
“The FTC's order to unwind the acquisition will be automatically stayed pending appeal,” Illumina said.
Following the FTC Chief Administrative Law Judge's decision in favor of Illumina in September 2022, the company said it believes that it has a strong case on appeal.
“Illumina will move as quickly as possible and seeks to arrive at a resolution in the US Court of Appeals by late 2023 or early 2024, at approximately the same time as the decision in the European Court of Justice (ECJ) jurisdictional appeal,” the company added, saying that winning both appeals would maximize value for shareholders.
Illumina’s shares were 1.4% down at $226.89 by 1:30pm in New York.
Contact the author at stephen.gunnion@proactiveinvestors.com