BELGIUM – EU antitrust regulators blocked Illumina’s acquisition of biotechnology company Grail, saying that Illumina failed to address its concerns about the deal restricting competition.
The European Commission, which acts as the competition enforcer in the 27-country bloc, said US life sciences firm Illumina’s remedies did not adequately address its concerns.
Illumina completed the deal in August last year ahead of EU regulatory approval, resulting in an order from the watchdog to keep Grail separate and to appoint independent managers to run the company until they decide on the transaction.
But the European Commission, which polices competition issues, said the buyout “would have enabled and incentivized Illumina to foreclose GRAIL’s rivals, who are dependent on Illumina’s technology, from access to an essential input they need to develop and market their own tests.”
Illumina is a major supplier of next-generation sequencing (NGS) systems for genetic and genomic analysis, while GRAIL is a health company developing blood tests to try to detect cancer early.
GRAIL has two additional pipeline products namely, a diagnostic aid for cancer testing used to confirm a diagnosis of cancer in symptomatic patients, and a minimal residual disease test, to detect potential relapse in patients after cancer treatments.
Illumina completed the deal in August last year ahead of EU regulatory approval, resulting in an order from the watchdog to keep Grail separate and to appoint independent managers to run the company until they decide on the transaction.
Illumina said immediately it will appeal the ruling, which would force it to unwind the US$8 billion deal that it closed in August last year.
At the same time, it added it would consider other strategic alternatives for the unit, in the event that its appeal fails.
Illumina has held Grail, whose technology can screen asymptomatic patients for more than 50 types of cancer, as a separate company while the EU’s review played out.
“Illumina can make Grail’s life-saving multi-cancer early detection test more available, more affordable, and more accessible – saving lives and lowering healthcare costs,” general counsel Charles Dadswell said in a statement by the company.
In her ruling, EU Competition Commissioner Margrethe Vestager had taken a very different opinion, echoing the concerns of the US Federal Trade Commission.
The FTC has also initiated an administrative review of the deal, despite a ruling from the agency’s chief administrative judge that the merger would not harm competition.
“With this transaction, Illumina would have an incentive to cut off Grail’s rivals from accessing its technology, or otherwise disadvantage them,” Vestager said.
“It is vital to preserve competition between early cancer detection test developers at this critical stage of development,” she added, noting that Illumina had failed to put forward any remedies to address the Commission’s concerns.
The Commission deemed Illumina “currently the only credible supplier of a technology allowing to develop and process” the cancer tests that Grail and others are striving to develop.
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