USA — The Federal Trade Commission (FTC) has directed Illumina to divest its liquid biopsy developer Grail in a bid to eliminate antitrust concerns and foster competition in the cancer diagnostics market.
The directive marks the latest twist in a prolonged regulatory and legal tussle that has embroiled the acquisition of Grail by Illumina since it was announced in 2020.
In September 2021, an administrative law judge dismissed the antitrust charges brought by the FTC, a ruling that the latest FTC order overturns.
The FTC’s decision comes in light of the crucial role that Illumina plays as a supplier of genetic sequencing equipment to cancer test firms, which has led to concerns that the acquisition of Grail would stifle competition in the market.
Illumina, a San Diego-based firm, has vowed to appeal the FTC’s directive to the U.S. Court of Appeals and expects to resolve the matter by the end of this year or early next year.
The legal dispute is expected to coincide with a separate appeal in Europe, where antitrust regulators have also raised concerns over the acquisition.
Despite regulatory scrutiny in both the U.S. and Europe, Illumina closed the Grail acquisition in 2021
However, the decision to divest Grail could mean the loss of a significant revenue stream for Illumina.
The liquid biopsy market is predicted to grow rapidly in the coming years, and Grail’s innovative technology has the potential to transform the cancer diagnostics industry.
Grail, a spin-out of Illumina, has launched Galleri, a liquid biopsy test that detects genetic markers of more than 50 types of cancer from a small blood sample.
Galleri is the only multi-cancer early detection test currently available on the market. It relies on Illumina’s equipment and supplies, as well as the company’s dominant next-generation sequencing technologies.
Earlier detection with Galleri could lead to better outcomes for cancer treatment.
The FTC order for Illumina to divest Grail has significant implications for the company’s position in the growing liquid biopsy market, which is projected to be worth US$5.96 billion by 2030 according to Grand View Research.
As the largest share of revenue is expected to come from assays for circulating tumor DNA (ctDNA), Illumina’s loss of Grail’s technology and expertise in this area may hinder its ability to capitalize on this expanding market.
This is especially significant considering the high level of interest and investment in Grail, which raised Grail has raised a total of US$2B in funding over 5 rounds. Their latest funding was raised on May 6, 2020 from a Series D round.
In addition, Grail’s development of a blood-based ctDNA screening test for early-stage cancers garnered attention from notable figures such as Bill Gates and Jeff Bezos.
With Grail’s divestment, Illumina may face challenges in competing with other privately-held diagnostics developers focused on liquid biopsy tests, as Grail was among the companies ranked on Clinical OMICs’ list of top fundraisers in this area.
As the legal battle continues, the ultimate outcome remains uncertain, and the fate of Grail hangs in the balance.
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